The average cost of private health insurance has jumped 25 per cent over the past four years.
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That’s more than three times the rate of inflation and comes on top of the latest rise of about 5.6 per cent that took effect from April 1.
With the cost of medical procedures skyrocketing, private health insurance has become a necessity for people nowadays rather than a luxury, particularly when you take into account the impact of increasing waiting lists in public hospitals.
The latest increase means the average Australian family is paying $200 a year more for their health insurance. It’s not unusual for a family with a decent level of cover to be now paying a premium of $100 a week.
For many, the biggest insult of all is the gap between what they’re charged for a trip to hospital or a new pair of glasses, or a trip to the dentist – and what rebate they receive back from their health insurer.
One recent example was a surgeon’s bill of $1700 to remove four wisdom teeth under a general anesthetic in a private hospital. The private health insurance company paid just $400 of that bill –leaving a gap of $1300. Throw in a $200 more for the anesthetist and it’s a hefty out-of-pocket expense.
It comes as no surprise, then, that people are dropping their private health insurance in their droves. A recent survey found one in four private health fund members were considering dumping their cover due to increase costs. The amount Australians pay to their private health insurer is already subsidised by the federal government.
If Greens leader Dr Richard Di Natale and the Australian Council on Social Services had their way, that rebate would be dumped, increasing the cost of premiums by about a third.
Dr Di Natale wants those savings funnelled back through the public system, while ACOSS says private health insurance mostly benefits the wealthy. Both of those beliefs are flawed. Any premium increase of that magnitude would put enormous pressure on an already struggling public system.
And any suggestion that only the wealthy have private health insurance is nonsense. In 2011-12, there were 9.7 million Australians with private health insurance - about 60 per cent of the adult population.
With an election looming, and political parties looking for ways to reduce costs, any decision to meddle with the health insurance rebate must be considered extremely carefully.