40,000 Australians have their say on private health

Almost 40,000 Australians have flooded the Government’s online survey asking whether they are getting value for money from their private health cover and how best to improve their policy.

Page last updated: 05 December 2015

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5 December 2015

Almost 40,000 Australians have flooded the Government’s online survey asking whether they are getting value for money from their private health cover and how best to improve their policy.

Minister for Health Sussan Ley said the response was “phenomenal” and announced today she was extending the survey closing date until Monday.

Ms Ley said she did not want people to miss out and this would give them one last chance this weekend to put aside a few minutes and make their views count by clicking on the survey here.

“To have upwards of 40,000 responses to a voluntary Government survey in just four weeks is unheard of and shows private health insurance really is the new barbeque-stopper,” Ms Ley said.

“Consumers are angry and fed up with endless large premium increases are eroding the value of their private health cover and it’s showing in the responses.

“Some people like Labor tried to claim it was a waste of time and money asking Australians their views on private health – well the public have spoken.”

Ms Ley said that while the sheer volume of responses to survey, which include written comments, would take longer than expected to collate, the clear message coming through was that the majority of respondents were unhappy with the value for money they were receiving from their current health cover.

Ms Ley said it was also clear ongoing average premium increases of five and six per cent every year were playing a part in consumer dissatisfaction and, with some insurers warning they were set to continue for the next decade, action was needed to “break the vicious cycle”.

Ms Ley said she would investigate whether a stronger public-interest test was needed to support Government when approving premium increases, including consideration of an insurer’s full financial position, not just their cost of paying out member claims.

“I acknowledge health costs are going up for insurers, as they are for Government. This is the trade off to the positive benefits of living longer, more prosperous lives,” Ms Ley said.

“I am also committed to working with the private health insurance sector to find ways to bring down costs for consumers by reducing unnecessary regulation and looking at more innovative ways to fund health care.

“However, premiums have been increasing above inflation for over a decade now across successive Governments.

“It’s become clear to me through my consultations that the current system for analysing and approving premium increases doesn’t allow Government to apply enough rigour to an insurer’s full financial position, including what returns they make each year.

“We need a circuit breaker.”

For example, in 2015, benefits paid out by private health insurers to their members grew by over $1 billion – or 7.9 per cent – last year to an industry total of almost $17 billion, leading to recommendations that an industry average premium increase of 6.2 per cent be approved. However, the current premium approval process does not take into account the overall financial position of private health insurers or the broader industry.

This is important, given recent analysis by global financial services firm Credit Suisse suggesting Australian private health insurers and industry had the financial capacity to absorb costs and pass on increases as low as 2.5 per cent over the next three years.

“We need a public-interest test that actually supports Government to work in the public interest,” Ms Ley said.

“Until change occurs, Governments will continue to be hamstrung to fiddling around the margins without making a serious difference if they do try and push back on proposed premium increases, as Labor proved in office.

“It’s therefore an area that I have requested to be looked at in greater detail as part of our broader reform package to be delivered next year.”

In the meantime, Ms Ley said she was currently seeking urgent advice about what financial information was publically available from insurers and what additional provisions could be applied to the current process to ensure the Government had “the full picture” ahead of approving the next round of premium increases in early 2016.

“I no longer believe it’s possible for consumers to genuinely shop around for a better deal if they are unhappy with their insurer increasing their premiums,” Ms Ley said.

“I’m happy to work with insurers to reduce their costs. But I’m also putting insurers on notice that I will be closely scrutinising their applications for the next round of premium increases based on their full financial position.

“I won’t be afraid to ask for more detailed information about what insurers are really earning to ensure we can deliver the fairest premium increases possible under the current system while our longer-term reforms take place.”

Ms Ley said a total of 38,573 survey responses had been filled out so far, with people able to go direct to the survey start page.


Media Contact: Troy Bilsborough 0427 063 150 or Steve Block 0428 213 264

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