How much more you’ll pay for health cover in 2021 | Ralph Lauren

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The Federal Government has authorised a rise in private health insurance premiums that will cost families an extra $126 a year on average.

The 2.74 per cent annual increase is due to take effect from April 1 next year, and builds on rises of 2.92 per cent this year and 3.25 per cent in 2019.

Almost 14 million Australians will be impacted by the cost increase.

A single person will pay an extra $1.14 per week, and a family will pay $2.44 more a week.

But Health Minister Greg Hunt said it was the lowest annual average premium increase in 20 years.

“Australian government reforms mean private health insurance will continue to offer Australian families affordable choice and flexibility in their health care,” his office said.

Opposition health spokesman Chris Bowen said the confirmation of the 2021 increase was a blow for families, especially given some funds were likely to impose higher premiums.

“Hunt’s hike is well above projected inflation, and will cost families an extra $126 on average,” he said.

Mr Bowen also noted the competition watchdog recently found insurers had paid out $500 million less in benefits due to COVID-19 measures restricting access to some treatments.

“With premiums soaring and (welfare) benefits falling, it’s no wonder that health insurance coverage is already at its lowest level in decades — and today’s announcement will only add to the pressure,” he said.

The Consumers Health Forum of Australia said the hike would likely see more consumers drop private health insurance, with family and personal budgets already under strain.

“While the new rise is low compared to previous years… there are unlikely to be many people able to absorb a premium increase without further squeezing their budgets,” chief executive Leanne Wells said in a statement.

Three of the major health insurance providers have taken their increases even higher — NIB will lift premiums by 4.36 per cent, Bupa by 3.21 per cent, and Medibank by 3.25 per cent.

“Premium changes are never welcomed but the reality is that the cost of medical treatment continues to rise well above inflation,” NIB managing director Mark Fitzgibbon said.

Bupa managing director Emily Amos said the health insurer’s premium surge was less than the forecast rise of the cost of health care in 2021.

“We don’t want health insurance premiums to cost one dollar more than necessary,” she said.

“The reality is we are operating within an environment where the price of health insurance premiums is driven by rising healthcare costs.

“We’re absorbing a large portion of these costs on behalf of our customers while also working hard to provide better value for money.”

Medibank chief customer officer David Koczkar also defended their hike, saying private heath insurance had weathered an increased burden during the pandemic.

The country’s ageing population also make health costs more expensive, he said.

But the Medical Technology Association of Australia said private health insurers were fleecing consumers and making a killing.

“Aussies would be shocked to learn that, according to the June reporting from (industry regulators) APRA, corporate health insurers raked in $1.03 billion in gross profits last year alone,” chief executive Ian Burgess said.

“They even increased their management fees by 15.8 per cent, which includes things like executive salaries.”

The government returns about $6.3 billion to private health insurance holders through the private health insurance rebate scheme.

In 2019/20, Australians received a record $21.9 billion in benefits for medical services through the private health system, according to the government.

AAP



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