Private health insurance premiums are set to increase from April, but we are being told the costs to patients could have been much higher.
Premiums will rise an average of 5.59 per cent, down from almost 6.2 per cent last year.
It is the lowest rise Australians have seen in four-years.
ARTICLE CONTINUES AFTER THIS ADVERTISEMENT
It comes after Health Minister Sussan Ley stepped in, demanding health insurers either lower their premium increases or justify the hikes.
Ms Ley said 20 health funds had resubmitted a lower increase, with some cutting back as much as 1.5 per cent, easing costs for more than 93 per cent of Australians with private health cover.
Families and couples with a combined hospital and general treatment policy will on average save up to $166 while singles will save up to $83 when compared with the original premium requests by insurers for 2016.
“Consumers will be $125 million better off as a direct result of our request for insurers to resubmit lower premiums,” Ms Ley said.
She said Wednesday’s announcement was the first step in a broader overhaul of private health insurance, in a bid to deliver lasting savings for consumers.
Ms Ley said the government was looking at greater transparency around health policies, targeting so-called “junk” policies, confusing terminology and hidden payments.
It’s also working to change the way private health insurers are required to pay for medical devices like pacemakers, with savings expected to begin flowing to consumers from next year.
Under existing rules, a pacemaker for a private patient can cost the insurer $43,000 compared with $17,000 if they were treated as a public patient, which drives premiums higher.
PREMIUM INCREASES BY THE BIGGEST FUNDS IN 2016
Medibank – 5.64pct (compared with 6.59pct in 2015)
Bupa – 5.69pct (6.50pct)
HCF – 5.42pct (6.50pct)
NIB – 5.55pct (6.55pct)
HBF – 4.94pct (5.96pct)
Industry average – 5.59pct (6.18pct)