2.92%: Health funds deliver lowest premium increase in 19 years

The Health Minister’s latest premium round announcement shows again that the country’s 37 private health insurers are doing everything possible to improve value for all Australian consumers.

Matthew Koce, CEO of Members Health, the peak body for 27 funds that are not-for-profit owned and run and closely connected to their memberships and communities of interest, welcomed Health Minister Greg Hunt’s announcement on Saturday of a 2.92 per cent average premium increase across the industry.

“The average increase of 2.92 per cent represents the sixth consecutive year that premiums have fallen, and is an exceptional result for consumers, Government and insurers alike,” Mr Koce said.

This is the smallest average premium increase in 19 years, since 2001, and is much lower than inflation for medical and hospital services, at 4.8 per cent.

“The private health insurance industry has worked tirelessly with the Government in recent years on its new product tiers and reforms to prostheses pricing, and is committed to finding additional ways to provide value to the 13 million Australians with cover,” Mr Koce said.

“Health costs continue to rise as utilisation increases and medical devices prices escalate – but still, Australia’s health funds are squeezing every dollar to make sure their members are being looked after.”

With public system waiting lists blowing out even further every year, Mr Koce said the value of Australia’s private health system could not be overstated.

Only the private health system guarantees fast access to high quality care, when needed, avoiding long public hospital waiting lists that can run into the months and years.

Insurers have managed six years of declining premium increases against a backdrop of rising benefits levels. In contrast, Commonwealth funding for public hospitals has increased at an average of 8 per cent over the past five years.

About 66 per cent of all elective surgery procedures take place in private hospitals, taking vital pressure of the already overstretched public system, and providing top-quality treatment to millions of Australians.

Australia’s not-for-profit, member owned and community based health insurers exist only to serve their policyholders. They consistently run on wafer thin margins, return around 90 cents in the premium dollar back to consumers as benefits, and outperform on customer satisfaction and retention.

The latest APRA data shows consumers are becoming increasingly aware of the excellent value offered by the Members Health funds because they are run for people, not for profits.

As a group, are growing at over double the industry average.

“With 37 health funds to choose from, it makes sense to shop around and the not-for-profit, member owned and community based health funds can represent excellent value for money,” Mr Koce said.

The latest premium round will come into effect on 1 April 2020.

Members Health is the peak industry body for an alliance of 27 health funds that are not-for-profit or part of a not-for-profit group, member owned, regional and community based, and who all share a common ethic of putting their members’ health before profit. Our funds represent the interests of more than 3 million Australians.

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