Australia Might See Yet Another Private Health Insurance Cost Increase | Get Financial Freedom Tips | Transform Your Financial Future


Friday, December 14, 2012

Australia Might See Yet Another Private Health Insurance Cost Increase

The year that is now coming to an end can safely be dubbed ‘private health insurance year’ in Australia, as it saw many fly off into a frenzy over the increased costs of their coverage. This is because the Australian government decided to adjust the income earning categories of the private health coverage rebate, thus causing many average income families to receive a smaller rebate than before. Now, as 2012 approaches its end, official rumors have it that 2013 will mark yet another increase in private health coverage costs. According to sources in the private health fund industry, the Australian government plans to follow through on demands made by providers, thereby allowing them to increase their premium costs. Cost increases are a natural occurrence in the private sector, and especially in the service segment – however, health insurance coverage premiums could come to be increased by as much as $150 per year, say the same sources.

Australia Might See Yet Another Private Health Insurance Cost Increase

By late November, private health insurance funds around Australia were expected to file an application with the state, through which they could request the approval of an increase in premiums. At the time, industry observers surmised the increase would be no lower than 5 per cent, at the very least, seeing how inflation levels in private health reached 9 per cent in 2012. For family health insurance premiums that cost $3000 per year, such an increase is likely to add up to $150, while for singles’ policies worth a yearly total of $1,500, the raise would amount $75. This might lead to a repeat of the scenario that unfurled during the first half of the year, when numerous Australians rushed online to compare private health insurance providers upon hearing of upcoming changes to private health insurance rebates.

News of the expected premium increase, allegedly scheduled for next year in April, comes at a time when public discussions of health costs have been firmly thrown into the limelight. A recent report from the Sunday Telegraph confirms that terminally ill patients are literally being thrown out of their homes, since Medicare rebates can’t quite keep up with the pace of inflation. The article tells the tale of a mother of two, living in Sydney and aged 52, who found it difficult to cover the $31,300 in chemotherapy and other medical expenses that her breast cancer entailed – all of it out of her pocket, since Medicare would not cover the costs of treating the affliction. The same source cites a recent study issued by the Menzies Center for Health Policy, according to which 250,000 of Australians spend over 20 per cent of their revenue on health care costs. Another study, published by Health Consumers NSW says many families of medical patients under treatment have to sell their homes, in order to afford the care.

The news of yet another private health coverage cost increase would likely drive many currently insured Australians to drop their policies altogether, says Carol Bennett, the chief of the Consumers Health Forum. Bennett also publicly criticized Tanya Pilbersek, the standing Health Minister, for not considering the situation of hundreds of thousands of Australians who are already struggling – both financially in the broader sense, as well as with the rising costs of access to health care. Against this backdrop, it seems like the Australian government is preparing for the big changes to its health insurance system, set for 2014. Starting from 2014, the Australian state will no longer increase the 30 per cent tax rebate to private health insurance, but only adjust it to inflation.

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