Health Minister Greg Hunt has warned that the private health insurance sector was on the brink of a catastrophe if consumers continued dumping their policies at the current rate.
Fairfax News reported that about 10,000 people a month were currently ditching their policies as a result of big price hikes and an ever-decreasing range of services covered.
In an exclusive interview with the media outlet published at the weekend, Hunt said he planned to introduce a reform package within a month that he hoped would dramatically reduce price hikes, after this year’s increase of 4.8 percent, although the lowest in 10 years, was more than double the rate of inflation.
He said the reforms are also aimed at simplifying the range of policies on offer, cutting waiting lists for private mental health treatment, and encouraging more young people to buy private health insurance to help balance insurers’ risks. Hunt has also been working on a deal with medical device makers to slash the price of devices, which would help cut the cost of cover.
The health minister said a failure to reform the health insurance system now could lead to a 1990s-style collapse in the sector, which would put huge pressure on the public health system.
But Fairfax said that the reforms may not deal with the range of ‘junk’ policies currently on offer, as doctors have requested. Fairfax said Australia currently had more than 40,000 different policy products on offer.
Hunt planned to introduce the reforms before insurers submitted their annual price increase requests in early November, Fairfax reported. The increases are announced in February every year and implemented in April.
Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.