Australia minister for health and aged care Mark Butler has said the Australian government is committed to ensure that the health insurance members get value. He was addressing a press conference on 19 January 2025 and responding to a query about private health insurance in the country.
Mr Butler said, “My overarching priority is to make sure I get value for health insurance members. Obviously, we need to make sure that the industry is viable, underpinning the important private hospital industry and other parts of the health system. But what I really want to make sure of is that consumers or health insurance members get the best possible value.”
He said the 29 private health insurers had made their submissions with a more reasonable premium increase by the 2 January 2025, however, we had to ask some of them to have a relook on their proposals as the government felt that these did not provide value to the policyholders.
The minister said, “I haven't yet got advice about those resubmissions. I expect to get that very soon, because I recognise that I need to make this decision as soon as practical. But again, the overarching priority is to make sure I get the decision right for the millions of Australia to put their hard-earned money into the private health insurance industry.”
A new data analysis published by the Catholic Health Australia (CHA) in December 2024 had revealed that corporate health insurers are pricing Australians out of quality private health insurance amidst a cost-of-living crisis.
While the average indexation approved in the 2024 premium round was 3.03%, data analysis of the major insurers shows some ‘Gold’ products increased by more than 12% between 2023 and 2024, said CHA in a media release.
"'Gold' products give customers cover for essential services such as maternity and mental health. This dramatic increase is making it unaffordable for patients to access this level of insurance," said CHA director of health policy Katharine Bassett.
"Despite these hikes, insurers are returning less to patients in terms of benefits, while private hospitals are struggling to remain viable."
A new report by the Commonwealth Ombudsman has suggested insurers are also putting up prices by closing products and opening nearly identical ones in a practice known as phoenixing. This is a behaviour CHA highlighted in its recent submission to the government on the annual private health insurance premium round.
"Our analysis finds large increases in the same gold products over time. In addition to that, insurers are also using phoenixing to push up prices even further," said Dr Bassett.
"With over 25,000 health insurance products available, the landscape is increasingly complex and confusing for consumers."
Recent government data demonstrates that more Australians now hold Silver products than Gold products, undercutting the value of health insurance to the community.