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Frankston Doorstop - Lowest health insurance premium increases in a decade

Transcript of Minister for Health, Greg Hunt discusses the lowest health insurance premium increases in a decade

The Hon Greg Hunt MP
Former Minister for Health and Aged Care

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Private health insurances will rise by the lowest amount in a decade this year. Lower than any year under Labor. Lower than the rate at which total payouts have increased for the private health firms.

So this is the lowest rise in private health premiums in a decade.

However I think it’s very important to note that any cost of living change can be difficult for many families and many singles. I think it’s important to acknowledge that impact.

Private health insurance is very important to 13 million Australians. That’s why we’re doing everything we can to produce results such as the lowest change in a decade.

That’s come about because we’ve put real pressure, downwards pressure on what would otherwise have been a far greater rise in costs that has come through a half a billion dollars of reductions we’ve been able to make in the cost of prostheses or implants.

And I’ve already spoken with the heads of the five major health insurance companies and the heads of the two health insurance bodies to strike an agreement to work together to put more downwards pressure on the cost of health insurance premiums.

It’s critical that we do this and it’s critical that we overcome the legacy that we inherited from the previous government of slashing rebates, of driving up the costs.

So we’re doing everything we can and it’s part of the long term National Health Plan, the commitment to Medicare, the commitment to hospitals, the commitment to mental health and the commitment to medical research.

Just in the last week we have announced new drugs for ovarian cancer, new drugs for lung cancer, new drugs for cystic fibrosis and $125 million for medical research into cancer, into dementia, into Indigenous health and into mental health.

So these are the commitments we make but we will work with the private health insurance companies and I also want to invite the states to work with us to ensure that they are not adding to the pressures on private health insurance and not adding to the public waiting list by bringing people in deliberately from private into public at the cost of public waiting lists in some of the states and at the cost of private health insurance.

So that commitment is real and clear and absolute. We’ve made good progress but every dollar matters to every family.


That’s got to be $200 I understand to an average family. What kinds of assessment have you done to see what impact that’s going to have on families, who, as you say, are already finding electricity bills, all manner of other bills going up?


Well these are the lowest cost rises in a decade …


What is that $200 going to mean?


What that means of course is that every single dollar, every single dollar is important to every single family.

And so that’s why we have put the pressure on through the reforms in terms of prostheses, why we are calling on the states to work with us, to bring down the pressure that the public hospital system is putting on by drawing in private health patients and driving up premiums.

Right now, the lowest cost rise in a decade but I have to say I’ve spoken to the CEOs of all five major private health insurers and all have agreed to work with us on more work to take the pressure off private health insurance premiums because every dollar matters to families.


But it’s a circular argument isn’t it? People are inevitably going to go in to the public system, back into the public system if premiums keep rising. So what impact, have you done an assessment on what kinds of impact this is going to have on people?


Well, what we have done is to work to bring the lowest possible change in premiums and it is the lowest in a decade.


But it’s still a rise in premiums.


Well, I think you’ll find it’s lower than any year under Labor.


But it’s still a rise in premiums, it’s $200 more for the average family…


Lower than any year in the last decade and lower than the 5.4 per cent which has been the total increase in payout that private health insurers have made.

So we’ve been able to bring it in lower.

These are decisions of the individual companies and I think it’s very important to note that the decisions of individual firms but the pressure we have applied has delivered the best outcome in a decade but we can still do better and that’s why we’re going to focus on the companies and on the system.


Why is it necessary for our premiums to rise?


Very simply, the total cost of payouts to firms has increased by 5.4 per cent.

This is coming at significantly lower than the total increase in actual payouts by private health insurers, and it’s come about because of the fact that we’ve been able to take half a billion dollars out of the costs. That’s how we’ve managed to get lower premiums.

But as has been reported in the newspapers today, what we’re seeing is some of the states deliberately trying to draw money from the private health insurers to pay for their costs, and that puts an additional pressure on private health insurance premiums.

The other thing of course is that we saw the rebate slashed under Labor, which drives up the cost. So that’s what they did. By contrast, we believe in private health, alongside the public health system. The two are an indispensable part of universal access to healthcare in Australia.


What about the rebate? What’s it going to mean for what taxpayers are going to have to pay additionally?


Well, what we’re expecting is the Commonwealth to be contributing over $6 billion towards the private health insurance rebate, so I think that’s a very significant investment.

We will be contributing more than $6 billion over the coming year towards the private health insurance rebate.


There’s a suggestion today that anyone under 31 and under 90,000 a year should just opt out.


Look, individuals have to make their own choice, and many people, many people want the security, they want the choice, and they want the coverage of private health insurance.

It’s an important part of the system, and 55 per cent of Australians, 13 million Australians have private health insurance.

Our job is to take the maximum pressure off that possible. We have made important steps this year with the lowest rises in a decade, reversing the trend under Labor.

This is lower than any year, any year under the previous Labor Government, but we have more to do, and that’s why I’ve spoken to CEOs, and that’s why I work with the states.


What can you do with the states? Because the states are trying to offload it onto the public system. What can you do? Is there any way of sort of sanctioning the states for that?


Well, I want to work collaboratively with the states, and I’d say that this is something that some states are doing more than others, and to understand why they’re doing that.

I think it’s important for state ministers to indicate whether they have set targets for pulling private health insurance patients out of the private system onto the public system and in so doing increasing waiting times, I think this is very important, increasing waiting times for the most needy public hospital and public health system patients.


I’m just wanting to know, there’s going to be an extreme health alert in New South Wales today. Do you have any sort of comment on how the states are handling these kinds of issues at the moment?


Look, I think the states have dealt with the public health issues of extreme heat well. No criticism at all on that front.

I think all of the states which are facing extreme temperatures are doing the right thing. The biggest issue for families of course is massive increases in electricity prices because of some of the targets in Victoria and South Australia and Queensland, which are deliberately by Labor state governments, driving up the cost of electricity.

Deliberately. Whereas we’re trying to put downwards pressure on the price of health insurance premiums and leading to the lowest change in ten years.

You have state governments in South Australia, in Victoria, and in Queensland deliberately, intentionally driving up the cost of electricity for families, and I think it’s time that they rethink those policies. Alright, thank you very much.


Can I just quickly ask for families that don’t understand why they’re paying more, for the people who just want to go hospital and make sure that if they do need an ambulance they’re covered and they can choose their surgeon or whatever.

I mean, where is the money going? We’ve seen inflation has only gone up about 13 per cent, I think they said, in the last 10 years, but these premiums have gone up in excess of 40 per cent. So where is the money actually going?


It’s correct that under Labor, health insurance premiums went up 38 per cent over their period in government.

What’s actually happened here is that we are now putting downwards pressure on it through the reforms on things such as prostheses or implants where we’ve taken out half a billion dollars of cost.

Primarily, the money is going to the states, through the state system, through a deliberate policy of trying to pull in private health patients, but that’s at the cost of those that own private health insurance.

Okay, thank you very much.

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