As Australians are urged to re-assess their private health cover needs ahead of potential premium increases on April 1, new data reveals profits for health insurers have risen by almost 50 percent in five years.
In releasing its Private Health Insurance Report Card 2024, the Australian Medical Association (AMA) has urged consumers to check compare policies to ensure they were getting value for money.
AMA President Danielle McMullen said choosing private health insurance was a confusing experience, with the report card showing rebates for identical procedures varied greatly between insurers.
“Consumers should look at the upfront premium cost of the policy, but they should also closely look at the rebates for any procedures they are likely to need,” Dr McMullen said.
“For example, we found a $510 difference between the highest and lowest rebates for the uncomplicated delivery of a baby.
“Private health insurance premiums will inevitably rise on 1 April by an as-yet undetermined amount. It is an important time for consumers to look at their options.”
Dr McMullen said the report card also showed that over the past five years, net insurance profits (including net private health insurance investment income) have risen much more sharply than benefits paid to patients.
“While net profits for insurers have increased by almost 50 per cent, the patient rebate for medical services has increased by just over 10 per cent,” she said.
“There’s no question private health insurers need to make a surplus to be sustainable, but it is clear they should be returning more in benefits to patients as a proportion of premiums.”
Dr McMullen said 84 percent of hospital insurance policy premiums were returned to patients in the form of rebates and other benefits for hospital treatment last financial year.
“(That’s) a small improvement from the previous financial year, but still well below where it should be.”
She said the AMA was calling on the Federal Government to mandate insurers to return at least 90 percent of private health insurance premiums back to consumers in the form of benefits.
