Health premiums on way up again
Sydney Morning Herald
Saturday February 26, 2011
FAMILY health insurance premiums are to rise by an average of $2.88 a week after intense negotiations in which one health fund has rejected a government demand to reduce its proposed increase.Australian Unity says its planned premium rise was "materially lower" than the average 5.57 per cent increase across the industry announced yesterday.But the Health Minister, Nicola Roxon, who said she had "very clear advice that they [Australian Unity] can offer their consumers a lower increase than they have requested, and I am not at this stage approving their application because I am not convinced they have done all they can to keep the increase at a minimum level".Ms Roxon declined to reveal what increase Australian Unity had sought. But if the issue remains unresolved and she refuses Australian Unity's proposal, she would be required to table details of negotiations in Parliament.Australian Unity, the sixth biggest health fund, says it is an industry leader in providing benefits not offered by other funds and had maintained premium increases below the industry average for eight of the past 10 years.Unlike some other funds, including the government-owned Medibank Private, Australian Unity has not reduced or removed benefits to rein in premium increases.The fund's chief executive, Amanda Hagan, said that two days ago the fund had been given until 5pm yesterday, but Ms Roxon had made her announcement at midday."We will continue to work with the minister's office to resolve this issue and provide certainty for our members," Ms Hagan said.Ms Roxon's announcement comes after weeks of horse-trading in which 17 funds were asked to resubmit their original bids for the premium adjustments which take effect on April 1 and will mean single policies will rise by an average $1.44 a week.Ms Roxon said there had been only one other case previously where the government had not approved a revised bid from a health fund which had been asked to reconsider.In a week in which Australia's biggest private hospital chain, Ramsay Health Care, reported a half-year profit rise of 27 per cent, the health funds are warning of further big rises in payouts to their members to cover private health care.A government briefing document says insurers are forecasting benefit outlays to rise by an average 9.45 per cent over the next 12 months.The document acknowledges that the health funds have experienced "significant growth" in the benefits they have paid to members - a total of $12.2 billion last year, up from $11 billion in the previous year.The Australian Health Insurance Association's chief executive, Michael Armitage, said there were more than 11.7 million Australians with private cover.The National Seniors Australia chief executive, Michael O'Neill, said the premium rises were a fresh blow for retirees coming a day after the government's carbon tax announcement sparked fears among retirees of a significant jump in living costs."Pensioners and self-funded retirees are already grappling with rising food, energy and health costs. Today's announcement is just another assault on their way of life," he said.
© 2011 Sydney Morning Herald