Increase In Health Insurance Premium Likely In Australia

With the ever increasing technological advancement, improved health care and a significant rise in medical costs, an increase in the private health premium is likely be to be implemented sooner or later in Australia. Despite reports of profit, insurers have approached the Federal Government to approve a 5 to 7% increase for the fifth consecutive year.

If the proposal were to be approved, health consumers would have to pay nearly $300 for their payment of their private health insurance premium. It would be 40% more than what was paid 5 years ago for the same amount of health coverage. This is expected to be a double blow, when the inflation rate has doubled over the previous years.

The Australian Medical Association has issued a warning against the anticipated rise. It is further believed that the move would dislodge more people out of the private health care system, paving way for a destabilization of the public health system. A mixed opinion has been obtained regarding the proposal from government and health insurance officials.

"I haven't seen any reason for how they can justify that level of increase. If people leach out of the private health system because it becomes too expensive, or the products do not give people the cover they require, then we will really alter the balance and cause tremendous destabilization," said Dr Mukesh Haikerwal, President of AMA.

"These increases, in dollar terms, wipe out the contribution of the government's rebate, even at the higher levels now provided for older Australians," said Labor health spokeswoman Julia Gillard.

"No one likes to see premiums go up in this sector. The funds are only allowed to increase premiums to the extent it is strictly necessary to maintain services and preserve capital adequacy," said federal Health Minister Tony Abbott.

"I'm aware that the cost pressures are continually escalating. That's not rocket science. Everybody knows that the technology that is available for sick people today is 20 times better than it was not very long ago and it's more expensive," said Michael Armitage, Chief executive of Australian Health Insurance Association.

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Health insurance companies have refused to disclose the percentage of increase requested from the Government. The details are likely to be announced in late February or early March. The new approval would be implemented from the first of April.