Private Health Insurance: Health Minister can’t allow consumers to continue to pay more, for less.

2 February 2016

The request by the Health Minister, the Hon. Sussan Ley, for more information from private health insurers to justify their annual premium increases, must take into account whether the insurers' policy rebates are actually keeping pace with the health and overall cost of living increases experienced by their 13 million policy holders.

Dr Rick Olive, President of the ADA, said, “While we welcome the Minister’s call for private health insurers to provide greater transparency behind their premium increase applications, we will continue to draw attention to the fact that these premium increases have been overall consistently higher than the cost of living index as well as the generally higher health cost of living index.

“For years the dental profession have been pointing out that private health insurers’ premiums have been rising but the overall amount they actually rebate back to policy holders for dental treatment has hardly improved.”

More Australians have general treatment or 'extras' policies (over 13 million) compared to hospital treatment policies (11 million). This is reflected in the fact that dental services account for the largest segment of claims made under general treatment policies (over 9 million out of a total of 21.5 million services in September 2015).1

This means that for years the majority of Australians with general treatment policies have been paying higher premiums, yet are not seeing their level of rebates for dental treatment increased commensurate to the extra amount they pay for their policies.

Dr Olive concluded: “Not only must the Minister consider whether the figures add up at the private health insurer end, but more importantly whether insurers’ policies will provide higher rebates to improve consumers’ access to healthcare. The Minister cannot allow consumers to continue to pay more for less”. 

1 Australian Prudential Regulation Authority, Private Health Insurance Quarterly Statistics September 2015 (issued 17 November 2015)