Health Minister Nicola Roxon revealed yesterday, PRIVATE health insurance fees are set to soar by close to 6 per cent this year, double the rate of inflation. Ms Roxon announced yesterday that premiums would increase by an average of 5.78 per cent from April 1 -- three times the annual 2.1 per cent rate of headline inflation and nearly double the 3.4 per cent underlying rate preferred by the Reserve Bank. However, it is in line with the rise in the consumer price index for health, which was 5.9 per cent last year.
Ms Roxon defended the increase as lower than last year's 6.02 per cent, saying it was below industry expectations and "significantly less than the last five years of the Coalition government, where the average increase was 6.63 per cent".
She said the government had assessed private health insurance premium applications "to ensure that increases are the minimum necessary to meet legal requirements such as maintaining the solvency of insurers".
"During the premium process, I required resubmission from more than half the health funds, and as a result the premium increases for 8.5 million Australians have been reduced," she said.
The admission comes as the government continued its war of words against the opposition over its refusal to support in the Senate the slashing of the private health insurance rebate.
The government wants to phase out the 30 per cent rebate for singles earning more than $75,000 and for families on more than $150,000, saying the move would save more than $100 billion by the middle of the century.
Opposition Leader Tony Abbott has slammed the move as "a clear broken promise".
The Australian Health Insurance Association welcomed the announcement, saying health funds would inject an additional $1bn into the healthcare system next financial year, bringing total expenditure on private health treatments to more than $12bn.
"Today's premium adjustment by Health Minister Nicola Roxon acknowledges the increasing cost of healthcare and identifies an expected increase of 7.94 per cent in expenditure by funds on behalf of their 11.4 million members in the coming 12 months," chief executive Michael Armitage said. He said the premium increases acknowledged the increasing cost of healthcare and were needed to pay for the provision of services and to meet statutory prudential requirements.
Ms Roxon said 474,000 people had taken out private hospital cover since the government took office in December 2007.
She said 44.7 per cent of Australians had private hospital cover, "the highest coverage level since December 2001".
Ms Roxon said benefits paid to private health insurance members increased by 9.3 per cent to $11bn in 2008-09, while the CPI for hospital and medical services last year was 5.9 per cent.
Benefits paid are forecast to increase by 7.94 per cent for the 12 months ending 31 March, 2011.
