The Albanese Government has ensured Australians get value for money from their private health insurance, with the average cost of private health insurance premiums rising at a much slower rate than the increase in wages, the age pension and inflation.
After running the ruler over the claims of private health insurers and considering their years of record profits, the Government has approved an average industry premium increase of just 3.03 per cent.
The 3.03 per cent increase is well below the annual rise in wages, social security payments and inflation, with wages rising by 4.2 per cent and inflation increasing by 4.1 per cent in 2023, and social security payments increasing in line with inflation.
This is the second year in a row that wages, as measured by the wage price index, have grown faster than health insurance premiums.
The increase in health insurance premiums is much lower than the increase to the cost of other insurance products, which rose by around 17% in 2023.
By taking the time and going through a proper process to interrogate the claims of insurers, the Albanese Government has achieved a better deal for Australians.
The Albanese Government will provide $7.3 billion this year to Australian policyholders through the private health insurance rebate, while also acting on the drivers of higher costs, by reducing the cost of medical devices used in the private health sector, streamlining access to new medical devices, and improving transparency of out-of-pocket costs for specialist medical services.
A total of 14.7 million Australians hold private health insurance cover and accessed more than $23.5 billion in health and medical benefits paid by insurers in 2023.
All premium changes will apply from 1 April 2024. Each insurer’s average change will be displayed on the health.gov.au website. It is each insurer’s responsibility to clearly explain to their policy holders any changes to their premiums and their options to make sure they have the right policy for their circumstances.
Quotes attributable to Minister Butler:
“I wasn’t prepared to just tick and flick the claims of health insurers, as the Opposition was urging me to do. I asked insurers to go back and sharpen their pencils and put forward a more reasonable offer for the 15 million Australians with private health insurance.
“While we know that any increase will be hard to bear during a global cost of living crunch, the Albanese Government has ensured that health insurance premiums will fall relative to Australians’ wages and Labor’s tax cuts mean all Australian taxpayers will get a tax cut on 1 July, so Australians earn more and keep more of what they earn.
“Private health insurers must ensure their members are getting value for money. When costs rise, Australians want to know that higher premiums are contributing to system-wide improvements, like higher wages for nurses and other health workers and ensuring that affordable services are available.”
