Government News Index
Health fees to rise by 7pc
By DANIELLE CRONIN, Health Reporter
Families would be slugged with up to $250 more a year for private health insurance, which would force battlers to abandon the funds, the Federal Opposition and health consumers said yesterday.
The predictions came after Health Minister Kay Patterson confirmed the Federal Government had approved a 6.9 per cent increase, on average, for private health insurance premiums from April 1.
Senator Patterson said the increase was warranted, and would ensure that claims were met while only adding about $2.60 a week, on average, to a family's policy costs - $138 a year.
But Opposition health spokesman Stephen Smith said families would spend between $150 and $250 more per year on private cover, and the Federal Government would face a $500 million budget blow-out to cover the increased 30 per cent rebate costs.
Mr Smith said the insurance impost would send consumers back into the public hospital system.
"For nine million Australians who have private health insurance, for the two to three million who took out private health insurance in the face of the Government's 30 per cent rebate and life-time cover, the great danger is that they'll vote with their feet and walk away," Mr Smith said.
Democrats health spokeswoman Meg Lees said rebate money should be redirected from the health fund shareholders' pockets to the public health system.
"The Government should immediately cap and means-test the rebate and put the money saved into public health services or scrap it entirely and reinstate the Private Day Bed Subsidy - much of what is provided in the private system is already subsidised by Medicare but the bed is not," Senator Lees said.
"And the Opposition should do the right thing and support the decision in the interests of the health system."
Australian Health Insurance Association chief executive Russell Schneider said the rise in claims and benefits paid out meant the premium increase was necessary.
The increase would differ throughout the industry, with AXA announcing a 1.5 per cent increase, HCF 2.5 per cent, MBF 3 per cent and Australia's largest health insurer Medibank Private 8.94 per cent.
Mr Schneider said the 30 per cent rebate was a wise investment which eased pressure on the public hospital system.
Consumer Health Fund of Australia chair Lou McCallum demanded an urgent inquiry into the efficiency of the private health insurance industry.
"Some private insurers run very inefficient businesses, some spend millions on television and other advertising without returning significant value for money to the consumer," Mr McCallum said.
"It is time for this industry to be called to account."
Australian Medical Association president Dr Kerryn Phelps said taxpayers deserved to know exactly what they were paying for.
"With taxpayers now contributing to private health through the rebate, they should have access to more information about the industry, the funds and especially the products and services they are purchasing," Dr Phelps said.
"After all, private health premiums are now a significant chunk out of an average family budget."
Health Care Consumers of the ACT president Russell McGowan said low-income earners who struggled to pay for private insurance were likely to abandon funds.
Consumers were dubious about the insurance companies' justification for premium rises given that funds had increased membership and profits.
The rise was approved despite the industry profits doubling to $800 million and accumulated reserves increasing by almost 50 per cent.