Why did my private health insurance premium go up?
Want to know why your premium is increasing come 1 April?
The Federal Government has announced its plan to introduce major reforms in the private health insurance industry and it should be good news for Aussies when it comes to health care.
nib, along with our fellow health funds and other industry players, have worked with Government to come up with solutions to make private health insurance more affordable and valuable for everyday Australians and this reform signifies the first step in achieving this.
Mark Fitzgibbon, nib Chief Executive Officer, says these changes show the government’s determination to deal with overpriced medical devices – a key step in helping to reduce the rate of premium inflation.
"Patients in private hospitals have been paying wildly inflated prices for medical devices; we’re sometimes paying up to five-times what it costs in the public system for exactly the same device. It's bordering on a scandal and all credit to the Minister in taking on the self-interests that have perpetuated the madness."
“Reducing the rate of claims and premium inflation is ultimately in everyone's best interest. While this year’s average nib premium increase of 4.48% was the lowest over the past 14 years, we still want to see it lower, especially given the pressures on household budgets. That’s easier said than done when the combination of price inflation and growth in hospital utilisation are closer to 5% per annum, but we're having a go," he says.
Another hurdle that the reform is trying to overcome is the lack of young people taking out private health insurance.
"Easily the most effective action for lowering pressure on premium increases for everyone is to attract more young people into private health insurance. That’s simply because it lowers the average claims cost. As insurers, we need to do much more if we're going to convince 'millennials' to take out health cover given they typically don’t see themselves at risk of having a major health issue," Mr Fitzgibbon says.
The reform will see under 30s encouraged to take out a health insurance policy by offering them discounts of up to 10%.
Another measure to be implemented is a ‘product rating’ for all policies. This will see policies placed into one of four categories – gold, silver, bronze and basic – with the aim of making it easier for people to understand the different inclusions of each.
We don’t expect the change to have any huge impact on our current product range, as we’ve already designed and ‘stamped’ our policies to reflect these types of categories, for example – Top Hospital, Mid Hospital and Basic Hospital.
The changes will be implemented over a two year period, starting in April 2018.
"Lower premium prices are important to encourage more Aussies to take out private health insurance, so, the medical device pricing initiative, along with the other reforms are a positive for nib and the private health insurance industry in general," Mr Fitzgibbon added.
At nib, we’re committed to keeping you informed; so we’ll be posting updates as more details on the private health insurance reform are released.
To check out your policy inclusions, visit Online Services. For any questions you can always chat to an nib consultant or call 13 16 42.