I can confirm reports today that I have asked all Private Health Insurers to provide additional information regarding possible premium increases for 2016 in an attempt to ensure consumers get the best deal.
I have held increasing concerns the current process used to assess and approve premium increases does not allow Government a rigorous assessment of an insurer’s full financial position.
Unlike other insurance industries, the Federal Government holds a significant stake in the private health sector, providing around $6 billion in rebates to consumers every year.
I have therefore tasked my Department to work with insurers to make sure any premium increase is the minimum necessary, taking into account APRA’s prudential requirements.
Health funds have been asked to resubmit an application for a lower premium increase or provide any evidence of extenuating circumstances.
It is important I am armed with the full picture before approving any premium increase, particularly as consumers are telling me they are finding it increasingly difficult to simply ‘shop around’ for a better deal.
Feedback from the Government’s consultations on private health insurance showed consumers have strong concerns about the affordability of their premiums; hardly surprising given premiums have increased at a rate of around 6 per cent per year for the past five years.
The Government recognises the desire of health insurers to engage in reform and we are keen to continue to work with them to deliver a better outcome for consumers.
This work will also complement the Government’s broader reform agenda for the private health sector, which aims to bring down costs for consumers by reducing unnecessary costs and looking at more innovative ways to provide health care.
As this remains a commercially-sensitive process, it is inappropriate to comment further on the detail of any proposed premium increases until a final decision is announced.