Health funds set

to propel Aussies into penury

The federal government has confirmed that Aussies will be hit with the biggest price hike to private health insurance premiums in five years – high inflation in insurance with high profits too. Meanwhile, Minister for Health, Mark Butler, to cope with public backlash, is trying to convince Australians that the health fund premium increase is a modest one and that they are getting value for their money.

6 March 2024

ALAN HAYES

 

WHEN I was seventeen and started earning my own way in life I took out health insurance and have been, not willingly, supporting an industry that once cared for consumers but is now only interested in how much profit sits on the bottom line.

 

Thinking back in time, health insurance carried no excess nor co payments and paid for everything. There were three levels of cover then: standard; intermediate; private. I paid for private cover and found that, much to my delight, when I had my appendicitis and the offending organ was removed, I received a refund from my health fund provider for my hospital stay. Why? Because although I was paying for a private ward, I chose to have the company of another patient and booked into an intermediate ward instead. Now of course, it’s how much money can we screw out of you and how many exclusions can we continue to import into the health cover.

 

Yet the Albanese Government, while drifting into the realms of fantasy, claims that the average cost of private health insurance premiums are rising at a much slower rate than the increase in wages, the age pension and inflation. Tell that to the people who are living on struggle street – it’s not only pensioners and low income earners, but the new middle class poor who are up to their eyeballs in mounting debt thanks to the ongoing interest rate rises imposed by the Reserve Bank.

 

The federal government further contend that 3.03 per cent increase in health fund premiums is well below the annual rise in wages, social security payments and inflation. Yet some health insurers have already leaped out of the gate ahead of the starter’s gun with a 4 per cent increase and some funds are expected charge even more. This demolishes Mark Butler’s claim that the health fund premium increases will be less than the 4.2 percent in wages increase and the 4.1 percent increase in inflation.

 

While Aussies get squeezed more, two of Australia's biggest insurers have revealed big rises in profits and dividends. Is this the smell of profiteering drifting through the air?

 

So, which side of the fence does the Reserve Bank Governor Michelle Bullock sit on when it comes to health fund profiteering? Just recently, she magnanimously conceded that there was some profiteering-driven inflation in the economy – using that to justify her decision not to punish households with another inequitable interest rate rise. Very big of her, while the greedy corporations still continue to ‘jackboot’ their way into big profits, adding to inflationary trends, while everyday Aussies continue to pay the price.

 

Last year’s December quarter consumer price index report pointed out that the Australian Bureau of Statistics confirmed the major role rising insurance costs were playing in the rate of inflation, saying, “Insurance prices rose 16.2% in the 12 months to the December 2023 quarter, which is the strongest annual rise since March 2001. Higher reinsurance, natural disaster and claims costs contributed to higher premiums for house, home contents and motor vehicle insurance.” Among others, that’s QBE and IAG, the latter being exceptionally greedy.

 

The insurance premium on my motor vehicle, insured through IAG (NRMA,) rocketed up my another $800, despite a 65% no claim bonus, a multiple policy discount, no claims and decades of being a loyal customer. They lost me in a heartbeat – no longer will I continue to support greedy, profiteering insurance companies. Yet the insurance companies all claim that the premium hikes are necessary to allow them to rebuild their reserves in the wake of repeated years of natural disasters and, in the case of health insurers, higher than normal claims.

 

It’s not just coincidence that the big health funds own medical centres and hospitals. It all adds to them controlling the profit that they can squeeze from their customers. But its premiums that matter to consumers, not being driven into penury so health insurers can increase their ‘pile’.

 

While it is obvious that health insurance premiums will be hard to bear during the current global ‘cost-of-living crunch’, the best Mark Butler can say is “private health 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.” Mr Butler may as well tell the cat not to eat the canary!

 

The problem that is now happening with health insurance is déjà vu. Consumers previously bailed out of health insurance at a fierce rate a few decades ago because health funds became greedy and were, surprise-surprise, more interested in profit – a reason why the federal government introduced the premium rebate almost a quarter-of-a-century ago to encourage Aussies to take up health insurance again and to help them pay their premiums.

 

So, what are the options now? Look for a better deal with one of the smaller mutual funds, who provide a better deal for their members, and give the profiteers the flick! It's what they deserve! Or will we see a repeat of the past - Aussies bailing out of health insurance in droves and relying on the public health system instead?