Health insurance premiums to rise by 2.7 per cent next year

Australians with private health insurance will pay more for their premiums next year, but some funds will defer the increase.

Federal Health Minister Greg Hunt has approved an average 2.7 per cent increase across all health funds, saying the government worked to secure a “record low premium change” because it “understands the importance of the cost of living for Australian families”.

Private health insurance premiums will rise in 2022 but by the lowest amount in more than two decades.Credit:Nic Walker

The change means the average single person will pay an extra $1.12 per week, and a family $2.42.

While premiums are scheduled to rise in April, Mr Hunt said “under proposed arrangements, many consumers will not receive a premium change until later in 2022” as some insurers have agreed to defer their premium rises.

The 2022 average premium increase is the lowest in 21 years, down from 2.74 per cent this year.

Many funds have given members partial refunds on premiums paid during the pandemic, when lockdowns and elective surgery bans prevented them from using their insurance to pay for medical treatment.

The federal government’s ongoing reforms to the Prostheses List, slashing the prices private hospitals pay for items like surgical sponges, knee and hips replacements, aim to significantly lower insurers’ costs in the first half of 2022.

“Our government has delivered on its commitment to improve the value and affordability of private health insurance, delivering the eighth successive decline in premiums changes since the Coalition was elected in 2013,” Mr Hunt said.

“We continue to implement significant reforms and investments to improve the value and affordability for the 14 million Australians who have private health insurance, and to support the private healthcare sector to deliver quality care.”

Before the COVID-19 pandemic, the health insurance industry was described as in a “death spiral” as Australians – especially the young – dropped their cover in growing numbers, but this has stabilised.

The most recent private health insurance statistics released by the Australian Prudential Regulation Authority show five consecutive quarters of hospital treatment coverage growth.

Federal reforms have increased the age that young Australians can stay on their family policy up to the age of 31 and removed the age limits for people with a disability to be included in a family policy.

The ongoing medical device reforms aim to “better aligning prices in the private system to prices in the public system”, Mr Hunt said.

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