The skyrocketing cost of health insurance have to stop 159



View Profile

The federal government is going to need a little more strong arm and a little less lip service to prove that they have our best interests in mind – particularly when it comes to curbing the skyrocketing cost of private health insurance.

With health insurance premiums having risen by approximately 30% over the past 5 years, and set to rise by a further 6% this year, it’s not hard to see why more than 500,000 dropped or cut back their policies in the past year, claiming that private health insurance is not only unsustainable but also increasingly less valuable in terms of coverage, and that the industry is gouging the Australian consumer.

Health Minister Sussan Ley has expressed the same concern. Ley, who signs off on the industry’s annual increases, has told the ABC, “I have held increasing concerns the current process used to assess and approve premium increases does not allow Government a rigorous assessment of an insurer’s full financial position,” she said.

“It is important I am armed with the full picture before approving any premium increase, particularly as consumers are telling me they are finding it increasingly difficult to simply ‘shop around’ for a better deal.”

In response, Ley has ‘ordered’ the funds to provide additional information to justify their proposed increases. We suspect the average Aussie would have a hard time believing the various insurers claims of hardship. Medibank Private, the former government owned insurer, is on track to record an operating profit of $470 million for FY16 – a rise of 27 per cent from its earlier forecast. Not exactly the strongest argument to lead with, all things considered.

Can you name anything else that has gone up 30% in the past 5 years?  Cars…no. Household groceries…no. Most importantly, wages have certainly not gone up 30%. In fact inflation has been running at historical lows or approximately 14.4% over the corresponding 5 year period. That means our health insurance premiums have gone up by more than twice the rate of inflation. Kind of speaks for itself doesn’t it?

So let’s talk: does the private health insurance industry, and the way premiums are calculated need a shake up?

Clearly the health insurance industry is not a simple one.  The dynamic between public and private health, our ageing population and the financial performance expectations of shareholders is a complicated one. Yet the government gets to sign off on premium increases.

No doubt they will be presented with a stereotypical arguments of ‘if the premiums don’t go up, coverage and services offered will have to go down’, ‘shareholders need to see growth in order’, but this only ever seem to affect the policy holder with higher costs and or lower levels of service.

In this, an election year, it’s an important subject matter to get on the table.  The impact on older Australians, in particular retirees, is pronounced, having to juggle increasing health related issues as well as financial restraints.

What do you think? Have your premiums become a relatively larger burden on your budget? Have you changed your package of inclusions or dropped it altogether in response? How has it impacted you?


Starts at 60 Writers

The Starts at 60 writers team seek out interesting topics and write them especially for you.

  1. They are pricing themselves right out of the market, with the help of The Liberal Government, it is fast getting to a point where private health will be unaffordable for all but the rich. Then they will scream that too many are only using medicare and want everyone to pay for it

    1 REPLY
    • Except that Medicare is being watered down more and more each year till it barely exists…Then we’ll have their favoured American system where you have to sell your home to have surgery.

  2. Another joke usually when you pay more for something it is not unreasonable to expect improvement in return. However with Health Insurance you pay more and receive less back when you have to claim .This is a bit tiresome and not an incentive to keep throwing our money into what we believe to be a very fat pot.

  3. God people can’t afford to live and surely can’t afford health insurance take the increase out of the money the Government are making by ripping us off over the price of petrol . Cheers MARLENE

  4. Struggling to keep my private hospital cover on a single pension. Each time the pension increases it goes to Medibank Private.

  5. Private health is a business, owned by share holders, they’re out to make a profit, its not a charity.

  6. It’s ridiculous the amount of increases each year. And we still hv to pay out of pocket expenses when we hv procedures done. But they will keep increasing because the government don’t say NO.

    3 REPLY
    • Deborah we have found over the years that we have not been out of pocket with our private health it has been Medicare that is the problem.

    • I’ve had private health insurance for years but increasingly wonder if I should really now opt out as apart from the monthly fees which keep on increasing, if one has the misfortune to be hospitalised, a premium of between $250 – $500 must be paid before admission and then the frustratingly expensive “co-payments” on top of all that. Admission in the public system is every bit as proficient as private and is absolutely free of charge!! The only drawback for the latter is the waiting time for public.

  7. It’s a bit rich rising by SO MUCH iver SO MANY years….rises on rip of other rises have a snowball effect too…..young people just won’t take it up and other will leave which puts the burden on fewer people…….

  8. One pays Medicare and Private health AND still have to pay again when having a procedure because some how something isn’t covered by either even though one is on the top cover. And the government goes on about free health care.!!

    17 REPLY
  9. This needs to stop !!!! We pay way too much as it is and in some cases don’t get much back Caught between a rock and a hard place as the public system is under massive strain and can’t cope with waiting lists of people who are in pain etc waiting for surgery !!!!!! Over 500,000 people pulled out of private cover in one way or another over last 12 months and this will get worse And so the snow ball gets bigger !!!!!!!

    3 REPLY
  10. Need health insurance as we age but impossible to afford on aged pension wish I could afford but nothing left over from pension each fortnight

  11. With my husband’s health situation and numerous hospitalisations and procedures over the years we feel we are probably ahead. We cannot afford to be without health insurance. For us to be reliant on the public system would mean that my husband would probably be dead now. The public system would certainly not have operated and taken out my husbands prostate. They would have chosen the watch and wait path. I call it the watch and wait until the patient dies then they don’t have to operate option. We know this because we have an acquaintance going through this at the moment in the public system. We have to keep our private health insurance so we will have to pay the increase. We will have to have a serious look at our budget.

    1 REPLY
    • I hv been in private for ever, never used it until of late, I like the choice to be able to go into hospital today not 6 months time. Guess we hv to pay the price.

Leave a Reply

Your email address will not be published. Required fields are marked *