WA’s biggest health insurer will have the lowest average increase in premiums of all big Australian health funds next year, with a rise of just under 2 per cent.
Federal Health Minister Greg Hunt announced the approved increase yesterday and revealed an industry-wide average increase of 3.25 per cent.
But health consumer groups still have concerns about the affordability of private health insurance against low or zero wages growth in recent years.
HBF’s premiums will rise by an average 1.94 per cent from April 1, the fund’s lowest increase in more than 15 years. It said the premium rise came against a 4.4 per cent increase in benefits for the average member last financial year.
Chief executive John Van Der Wielen said the small premium increase was the result of a broad push to control costs.
Other premium increases approved by the Federal Government include a 3.2 per cent rise by HCF —Australia’s largest not-for-profit health fund — and a 3.3 per cent increase by Medibank Private.
The Consumers Health Forum said while the average 3.25 per cent rise in premiums was some respite from the higher increases of previous years, it would typically add about $160 a year in costs to households.
Chief executive Leanne Wells said this was on the back of many people missing out on a wage rise for several years.
The lowest health fund premium rise in 18 years is still almost twice the inflation rate and health funds are warning their members some policies will rise by much more than the 3.25 per cent average figure.
The premium rise will cost a family about $135 a year, singles $62 a year and older Australians an extra $150 a year on average.
And, in a double whammy, when premiums rise the government subsidy will shrink to less than 25 per cent, further adding to hip pocket pain. The subsidy now covers 30 per cent of premiums.
Health fund members also stand to lose key benefits for natural therapies, including naturopathy, aromatherapy, homoeopathy, pilates and yoga, which will no longer be subsidised by the Government.
The premium rise will coincide with the introduction of a Gold, Silver, Bronze and Basic system. Under these reforms, policies will be graded into categories and health funds will only have to cover minimum levels of benefits in some categories.
For example, hip and knee replacements and births will have to be covered only in Gold policies even though many lower level policies cover these procedures now.