Health Funds To Raise Rates
The Age
Tuesday June 1, 1999
CANBERRA
Some Australians with private health insurance face premium increases of more than 10 per cent when the next round of health-fund price rises are announced today.
While the biggest health fund, Medibank Private, is expected to limit premium increases to less than 4 per cent, some smaller funds are expected to increase their charges substantially.
Other major insurers Medical Benefits Fund and HCF said their premiums would rise about 6 per cent.
The increases, which must be approved by the Health Minister, Dr Michael Wooldridge, are expected to average about 6 per cent across the nation's 44 registered private health funds.
The price rises could undermine the Federal Government's measures to revive the ailing private health insurance industry, including its $1.7-billion-a-year 30 per cent rebate, Medicare surcharge levy and Lifetime Health Cover initiative.
Health funds blame the increases on the spiralling cost of medical treatment, particularly due to new and expensive equipment, increasingly complex procedures and costly drugs.
But the increases threaten progress made earlier this year in stemming the flood of people abandoning private health cover. Figures released last month showed that in its first three months of operation the rebate helped lure 57,000 people into private health insurance, stabilising membership at 30 per cent of the population.
The insurance industry admits that the cost of premiums is a significant deterrent to taking out cover, along with the gap between medical charges and insurance benefits and multiple bills.
But the chief executive of the Australian Health Insurance Industry Association, Mr Russell Schneider, yesterday defended the premium increases. He said that while funds kept price rises to a minimum, they had to cover the cost of new and complex treatments. He also said some funds that were increasing premiums by more than 6 per cent were making up ground after keeping price rises low last year.
Dr Wooldridge would not comment on the rises except to say they would be ``the first for 15 months, great news".
Mr Schneider criticised private hospitals, saying new research had shown that few people under 55 believed they would ever go into a private hospital and therefore thought private health insurance was irrelevant.
He said the private health sector, including private hospitals, had to work harder to make health cover attractive.
``It doesn't matter how cheap you make private health insurance, it doesn't matter if you start giving it away," he told a Sydney health insurance conference. ``If people see no benefit in having private health treatment they will not buy insurance." -- with AAP
© 1999 The Age
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