Private health funds argue for premiums to rise


Program: EARLY AM
Date: 16/01/2017
Time: 6:05 AM
Compere: Kim Landers
Interviewees: Leanne Wells, Consumers Health Forum of Australia; Dr Rachel David, CEO, Private Healthcare Australia
KIM LANDERS: Good morning. This is AM, I’m Kim Landers.

The Prime Minister will soon announce his pick for a new Health Minister to replace Sussan Ley. One of the big issues they’ll face will be pressure from the private health insurance industry to increase premiums. Consumer groups warn if premiums keep going up more and more Australians will downgrade their policies or abandon private cover altogether.

From Canberra, Peta Donald reports.
PETA DONALD: Today is the deadline for private health funds to make their final submissions to the Federal Government on a price rise for this year. It’s expected they’ll ask to put their premiums up by around 5 per cent.
Leanne Wells from the Consumers Health Forum of Australia:
LEANNE WELLS: For consumers that’s not good news. I mean, we know from the surveys that we’ve done and we know from the surveys that the Government’s done that people are already concerned about the affordability and increasingly questioning the value of private health insurance. They value their policies, but they’re just not seeing the return for the average family, so it’s something that we’re starting to see people- a product we’re starting to see people walk away from.
PETA DONALD: The peak industry group, Private Healthcare Australia, says costs are going up with an ageing population and more Australians with chronic diseases. The group’s Dr Rachel David is expecting the new Health Minister to approve a price hike.
RACHEL DAVID: It’s a very well developed process and it’s very thorough so overall I’m not hearing any signals that there’s a problem with it at the moment. No I mean, no health fund wants to put up their premiums, it’s a reflection of the costs that they need to pay out.
PETA DONALD: She rejects reports that the value of insurance payouts has fallen at the same time as premiums have gone up.
RACHEL DAVID: In terms of the benefits paid, it’s not correct to say that the benefits paid are falling. Last year for Allied Health services like dental care we saw benefits going up by about 4 per cent, and for hospital care we saw benefits going up by 5 to 6 per cent in terms of what health funds were paying out.
PETA DONALD: What about the finding from APRA that payouts have fallen for chiropractic, dental, physio, and optical?
RACHEL DAVID: I did see that reported in the press recently and that reflected a point in time which was like three months of data. It didn’t reflect a 12 month view which is what we use when we look at what we’ve paid out overall. So overall in the year 2016, health funds paid out about 3.8 per cent extra on average for Allied Health services and close to 5 per cent more for dental care.
PETA DONALD: Some within the Government expect Malcolm Turnbull will choose New South Wales Senator Arthur Sinodinos to stay on as the next Health Minister. Whoever he decides on will have the difficult job of announcing the premium rise by late February or early March to start on the first of April.
KIM LANDERS: Peta Donald reporting.
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