Health funds have called for urgent reform of the insurance sector as they are struggling to deal with rising costs after the government strong-armed them into limiting fee hikes to the lowest annual rate in 19 years.
Greg Hunt, the Health minister said that the health insurance premiums would increase by an average of 2.92 per cent next April, after rejecting the funds’ proposal for averages hikes of 3.5 per cent. The insurers have said that the hospital claim costs are outpacing premiums, rising at 3.6 per cent, and that an exodus of younger people from the private system, which has been compared to a death spiral, threatens the private system’s stability.
Mr Pittaway, Citi analyst said, “There were 13 mostly smaller funds operating on net margins of under 1.5 per cent.” He also noted that could lead to higher premium increase in the future and expected another increase of 3 per cent in 2021 due to ongoing political pressure.
Medibank and other funds have been forcing the government to lower how much they pay for medical devices and want to be able to pay for some doctors bills outside of hospital, to save costs and make it insurance more attractive for young members.