The private health industry has today announced a record low average premium rate increase (3.95%) for 2018, with Australia’s largest not-for-profit health fund, HCF, demonstrating its commitment to addressing affordability in the sector, with the lowest of the big four funds (3.39%).
Chief Executive Officer, Sheena Jack, said HCF has worked hard to deliver on the promise to champion members’ health, and passing on savings wherever possible was critical. “HCF has led the charge, with an average premium rate increase of (3.39%), which is lower than last year, our lowest in more than a decade, the lowest of the major funds, and below the industry average.”
In what has been a year of change for the private health insurance industry following the announcement of major reforms by Health Minister Greg Hunt, consumers will be winners with health funds passing on the promised savings from the initial round of reforms to the prosthesis (or medical device) list pricing. The overhaul of private health insurance, which HCF has long consulted with the government on, includes changes that address affordability, transparency and quality across the health care industry.
“The ongoing sustainability of the health system needs consumer confidence, not only that private health insurance is affordable but that the entire system is focused on the best patient outcomes for all,” Ms Jack said.
HCF members and all consumers will reap the benefits as the first round of industry reforms, announced in October 2017, come into effect from 1 April 2018. Changes to the pricing of medical devices for health funds, phased over the next few years, means the industry has been able to deliver on its promise of passing on these savings in a reduced average premium rate increase for next year.
“This is great news for consumers and particularly our members. We know affordability is a major concern and we’re pleased that we have been able to provide some relief in the level of increase for our members.
“Today we can see the impact prosthesis reforms, and our own HCF initiatives to reduce cost, are already having on affordability. The announcement of this year’s record low average premium rate increase is a first step in this major reform of the health system. We look forward to working with the government to implement further reforms, which will provide stability to the industry by also addressing transparency and improving patient outcomes,” continued Ms Jack.
The average premium rate increase is calculated based by on forecasting of benefit payments and projected policy mix, and is approved by the Health Minister. The rate increase announced today is an average across all HCF policies. In some cases, HCF members will get a reduction in their premium, with the highest increase being 5.7% (affecting 1600 members). Nearly 60% of HCF members will have an increase of below 4%. In the last financial year, benefit payments across the industry have increased by 5%.