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Private health insurance premium increase reflects rising health costs

Media
01 Feb 2015
The federal government regulates private health insurance premiums, and has approved Australian Unity’s premium rise, which sits just above the industry-weighted average of 6.18 percent, but well below the average increase in cost of benefits paid across the PHI sector of 7.4 percent for the year to December 31, 2014.

Australian Unity Healthcare chief executive officer Amanda Hagan said its clear health costs are rising much faster than the rest of the economy, driven by an ageing population, growing levels of chronic disease and increasingly expensive medical technologies, and something needs to be done.

“It is simply unsustainable for health costs to be rising so much faster than the broader economy,’’ Ms Hagan says. “The health system needs to be fundamentally reformed, and while that reform might take a long time, it needs to start now.”

“We, that is governments, clinicians, private health insurers and others in the health sector, must develop a roadmap for lowering costs and improving quality. We need to look seriously at how reduce waste in the system and get the money flowing to primary care and prevention.’’

Ms Hagan said preventing people from needing expensive medical intervention and hospital care to treat their chronic conditions was part of the answer to controlling costs.

 “Our investment in preventative health and chronic disease management has now seen more than 50,000 people utilise telephone-based or in-home support programs. This is not only a valued service for our members and customers with great health results, but also an important brake on the health cost spiral,’’ Ms Hagan says.

Australian Unity’s corporate health fund Grand United Corporate Health also received approval for a 4.32 percent increase, up from 3.46 percent last year.

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