Modest premium increase a good outcome for fund members

23 Dec 2013Media Releases

Private health funds are forecast to inject an additional $1.15 billion into Australia’s health care system in 2013-14, bringing total expenditure on private health treatments to more than $16.5 billion.

Health Minister Peter Dutton today announced an average premium increase of 6.2 per cent reflecting the increasing cost of health care in Australia.

More than 12.4 million Australians have private health cover and most people understand that increasing medical costs and a subsequent increase in the benefits paid out on their behalf, requires an increase in premiums.

The private sector plays a key role In Australia’s health system, with 57% of all surgical procedures carried out in Australia being performed in private hospitals, including:

  • 55% of major procedures for malignant breast conditions
  • 57% of hip replacements
  • 60% of chemotherapy (cancer) treatments
  • 65% of major joint replacements
  • 71% of lens procedures
  • 81% of same day mental health procedures.

(Source: AIHW Hospital Statistics)

The benefits paid out on behalf of their members by private health funds during 2012-13 totalled $15.35 billion, which was an increase of 8.1% on the previous 12 months.

During 2012-13 the benefits paid on behalf of members included:

  • $7.9 billion in hospital treatment – up 6.9 % on the previous year
  • $3.9 billion in general treatment – up 11.3% on the previous year
  • $1.6 billion in payments for prostheses – up 5.8% on the previous year; and
  • $1.8 billion payments for medical specialists – up 7.9 % on the previous year.

Private Healthcare Australia CEO Dr Michael Armitage said “today’s premium increase is necessary to ensure funds remain financially viable, meet statutory prudential requirements and, most importantly, continue to provide members with access to quality health care.

“The average 6.2% premium adjustment compares favourably with the latest average public hospital funding increase of 14.1%. It is clear health funds have done everything they can to keep premiums as low as possible.

“Holding private health insurance remains the best way Australians can protect themselves from the the risk of being exposed to increasingly expensive health and hospital costs, while also ensuring they get the best quality care.

“However, there is no doubt policies introduced by the previous Federal Government are causing prices to be higher than they would have been otherwise.”


Media contact: Steven Fanner

[email protected] or 0402 913 603