The facts about health insurance and private hospitals

Fact Check: The facts about health insurance and private hospitals

Date made: 7 February 2025

Source: Australian Private Hospitals Association (APHA)

Document: The Australian https://www.theaustralian.com.au/business/companies/private-hospitals-need-450m-a-year-to-avoid-a-potential-industry-crisis-lobby-group-says/news-story/854ce03a033462b72aa79e7d99da596a?btr=169eec1e7481607cb9045d3b963a85f7

Verdict:

 

FACT

Like many businesses, some private hospitals have had a difficult time with lower demand for their services due to COVID-19 and rising costs for staff and supplies. However, they have received significant assistance.

Since the pandemic, the Australian Government provided more than $1.5 billion to the sector in viability payments during the pandemic and health funds provided more than $270 million outside of standard contracts for their members’ healthcare.

If an essential private hospital service in an area of need is at genuine risk of closure, health funds will work with all involved to ensure ongoing access. Health funds need a viable private hospital sector to serve their members.

Date made: 5 March 2025

Source: Australian Private Hospitals Association (APHA)

Document: https://docs.publicnow.com/viewDoc?filename=78587%5CEXT%5C3136F0F0B2792348A7BCD03143E478FE347D9B22_8057184D7719DB09303572EBDD44D4C2EF958DD3.PDF

Verdict:

FACT

Federal Government data also shows hospitals have opened during that time. Australia has more private hospitals than it did six years ago, and hospitals are continuing to open across Australia. For example, in the first two months of 2025, Ramsay Health Care opened new services in Albury-Wodonga on the NSW Victorian border, in Brisbane, and in Caloundra in Queensland. Adeney Private Hospital was also opened in Melbourne.

Date made: 12 February 2025

Source: Australian Private Hospitals Association (APHA)

Document: https://apha.org.au/wp-content/uploads/2025/02/Federal-Governments-job-to-fix-funding-fiasco-Media-Release-12.2.25.pdf

Verdict:

FACT

There is no evidence that health funds have underfunded private hospitals or owe them money, and there is no reference to this in APRA reports. APRA data shows health funds paid $18.73 billion in 2024 for members’ hospital treatment, up 8% on the year before. This was higher than health inflation (the changing cost of health services) which rose 4% during the same period.

Source: Australian Private Hospitals Association (APHA) and Catholic Health Australia (CHA) and Australian Nursing and Midwifery Federation (ANMF)

Dates made: 26 February 2025, 28 February 2025 and 6 March 2025 respectively

Documents: https://apha.org.au/wp-content/uploads/2025/03/Premiums-up-Media-Release-26.2.25.pdf and https://cha.org.au/new-data-shows-private-health-insurers-making-huge-profits/ and https://anmf.org.au/media-campaigns/media-releases/health-insurers-ordered-to-increase-funding-to-private-hospitals/

Verdict:

FACT

The average premium increase is 3.73% from 1 April 2025, which is lower than the rising rate of expenditure by health funds for their members’ claims, as well as the rate of health inflation (the changing cost of goods and services in the health sector which is 4%).

Source: Australian Private Hospitals Association (APHA)

Date made: 26 February 2025

Document: https://apha.org.au/wp-content/uploads/2025/03/Premiums-up-Media-Release-26.2.25.pdf

Verdict:

FACT

There is no evidence that health funds have underfunded private hospitals. APRA data shows health funds have consistently paid more to hospitals each year for their members’ care since 2022.

Source: Australian Medical Association (AMA)

Dates made: 12 February 2025 and 7 March 2025

Documents: https://www.ama.com.au/media/private-health-insurance-report-card-shows-reform-long-overdue and https://www.ama.com.au/media/reform-authority-must-sustainable-private-health-system

Verdict:

FACT

Australian Prudential Regulation Authority (APRA) shows in 2024, health funds returned a high of 88 cents on average to members for every dollar spent on premiums over the June 2024 quarter. This is the highest return of any type of insurance. Mandating a claims ratio of 90 cents in the dollar is unrealistic and would send some health funds broke.

Back to top