Better health and ageing for all Australians

Media Releases

Private health insurance premiums

The Private Health Insurance Administration Council (PHIAC)has announced that private health insurance premiums will rise by an industry average of 7.4 per cent from April 1. The rises have been deemed necessary to maintain the funds' financial position and ensure their ability to pay members' claims.

In this section:

14 March 2003

Private health insurance premiums

The Minister for Health and Ageing, Senator Kay Patterson, said all private health funds' applications for premium rises had been scrutinised by the independent industry regulator, the Private Health Insurance Administration Council (PHIAC), and the Department of Health and Ageing.

"The advice I have received is that the rises are necessary to maintain the funds' financial position and ensure their ability to pay members' claims," she said.

Last year, benefit outlays increased by nearly 16%, while income from membership contributions increased by less than 2%.

PHIAC announced today that private health insurance premiums will rise by an industry average of 7.4 per cent from April 1.

Senator Patterson said: "Nobody is happy about a price rise. I have told the funds they must become more efficient and competitive. The Government is determined that the funds deliver even better value for money to their members.

"Since 1996, we have reduced the average rate of increase in premiums by more than half of what it used it to be under Labor, and we have cushioned these with the 30 per cent rebate."

She said the Federal Government had introduced a range of measures to make private health funds more efficient and competitive, with the aim to deliver better value for money to fund members.

The initiatives include:

  • The Private Health Insurance Ombudsman will have increased powers to deal with complaints and resolve disputes.

  • Health funds will face increased scrutiny of their overall performance on a number of performance indicators, including membership, management expense ratios and reports from the Ombudsman on complaints.

  • The Ombudsman will present a "State of the Health Funds" report. It will contain information on how the funds are performing and serving their members. This will help consumers make a value-for-money choice when buying private health insurance.


Senator Patterson said the 30 per cent Private Health Insurance Rebate had delivered real benefits to Australian families and the health care system.

The rebate has:

  • Made private insurance affordable for Australian families by contributing, on average, $750 a year towards the cost of health insurance.

  • Taken the strain off the public hospital system. According to official figures, in 2001 public patient admissions fell by 15,000 patients.

  • Increased the number of people receiving treatment in private hospitals by a massive 245,000 - these are people who would otherwise be joining waiting lists at public hospitals.


Senator Patterson said: "This shows that an increasing number of privately-insured patients are choosing to receive treatment in private hospitals, taking pressure off public hospitals and restoring the balance in our health system by giving people greater choice - choice of doctor and choice of hospital.

"Australian families face being slugged by a tax hike of $750 under Labor's plan to cut the 30 per cent Private Health Insurance Rebate.

"The nearly nine million Australians with private cover know that private health insurance will always be 30 per cent cheaper under the Coalition than under Labor."

Media inquiries, contact Randal Markey or Sarah Higginbottom, Media Adviser, Senator Patterson's office, 02 6277 7220.