Health premiums must rise: industry
From AAP
04feb02
THE private health industry has backed a hike in health insurance premiums, warning an HIH-style insurance collapse could result if the rises were rejected by the government.
Medibank Private, owned by the federal government, has reportedly asked permission to lift premiums by 13 per cent because of a 60 per cent jump in payouts caused by the influx of new members.
If approved, the rise would be the largest among the health funds with AXA, MBF and HCF requesting rises of between five and eight per cent.
Prime Minister John Howard today said he believed a rise of 13 per cent sounded "a bit rich".
But Australian Health Insurance Association chief executive Russell Schneider said with 300,000 extra people in the private health system, there had been a blow-out in payments.
"Those price rises come about because of increased use and also because of better medicine, better medicine techniques, amazing new health technologies," he told ABC television.
"But they're currently provided at no cost, and ultimately we get to a point where the money coming in is less than the money that is going out.
"And once you get to that point, it's better to make a small adjustment rather than see people unable to get their benefits."
Mr Schneider said critics of the price rises needed to remember the rebate went to taxpayers, most of whom were private fund members.
"So it's really only just giving them back a little bit of money in return for the contribution they're making to the nations's health scheme," he said.
He said while it was hypothetical to say what could happen if the applications were turned down, an HIH-style insurance collapse was possible if double-digit increases for Medibank Private were not approved.
"If the fund needs that to continue to pay its claims, I think it would have to be justified because as we've seen from the recent HIH situation, nothing could be worse than to have an insurer deliberately holding down its price below its costs and getting to the point where it can't pay its claims," he said.
The government is expected to decide whether to approve the applications for premium rises by next month.
The opposition today called for the government to reject a massive hike in premiums, saying they could not be justified when the funds had already received up to $2 billion of taxpayers' funds.
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