The annual private health insurance premium round must undergo significant reforms to safeguard patient access to private healthcare amidst ongoing funding challenges. Catholic Health Australia (CHA) has urged the federal government to implement key changes, including directly linking annual premium increases to returns for patients and hospitals.
Under CHA’s proposal, insurers with the lowest returns to patients and hospitals would face limited premium increases, while those with higher returns would qualify for maximum increases.
“In the past five years, many insurers have banked significant profits while returning less and less to patients and hospitals.”
Dr Katharine Bassett, CHA Director of Health Policy
Linking premium hikes to member benefits ensures that profitable health funds prioritise their members’ interests and improve funding flows to patients and services. Last year, insurers returned just 83% of premiums to members, with some major funds returning less than 80%, falling short of the industry’s 90% gold standard.
“This funding imbalance has contributed to the closure of 71 private hospital services across the sector in the past five years — and more will follow if we don’t pursue urgent reform,” Dr Bassett added.
CHA also advocates for incorporating hospital cost data into the premium round process, managed by an independent body like the Independent Health and Aged Care Pricing Authority.
