PRIVATE health insurers have more than tripled their profits in the past year, with the industry hitting $1.8 billion, but many funds are still poised to slug their customers with a fee increase later this week.
Many families will be bracing themselves for a scheduled 2.7% rise in private health insurance premiums on Friday, April 1.
Bendigo MP Lisa Chesters predicted the price rise would cause many people to reconsider the value of membership.
"A lot of constituents have been calling my office and speaking to me directly at my listening posts (community meetings) about cost of living pressures," she said.
"The price of petrol is having an impact and so are the costs of groceries. Some insurers cannot justify lifting their premiums and I know at least one is delaying the increase until later in the year. But I don't really know if that really helps - will everybody be richer in a few months time?"
Health Minister Greg Hunt said the federal government was putting downward pressure on premiums and the increase of 2.7 per cent would be the lowest annual change for consumers since 2001.
The Australian Prudential Regulation Authority has released its report for the final quarter of 2021, showing an annual $1.8 billion after-tax profit for the sector - up from the $558.8 million in the 12 months prior.
It attributed it in part to premium revenue growth of 5.8 per cent over the year due to membership growth and premium rate increases.
APRA said more Australians took up the insurance last year.
However, Ms Chesters said the profits could also be due to people being unable to use their health cover last year due to COVID-19 lockdowns.
CANSTAR has said the average costs of private health insurance in 2021 were: $2218 for people under 36 years old, $2522 for those aged 36 - 59 and $2758 for those aged 60 plus.
Industry group for the sector, Private Healthcare Australia, said the cost of medical devices was driving up prices.
"Unfortunately, the cost of generic medical devices is consistently identified by APRA as the fastest growing area of healthcare claims expenditure, and therefore the main driver of premium increases," it stated.
"Over the past two years, growth in benefits paid for medical devices (3.8 per cent) has exceeded growth in benefits paid for medical services (3.0 per cent)."
The Australian Medical Association had voiced fears, in its federal budget submission, that young people would leave the system in droves.
"The AMA is concerned that the likely financial impact resulting from the COVID-19 pandemic including unemployment, underemployment and a slowing economy, will result in even more young people giving up their insurance, increasing pressure on an already unstable system," it said.
"To stem the exodus of policy holders, we need to increase the value and decrease the pressure on premiums, at the same time. This is a difficult task in a complex policy environment."
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