Around 2 million Australians have ditched private health cover in the last five years as premiums soar.
According to figures from the Australian Competition and Consumer Commission (ACCC), the price of health insurance premiums in the 2017-18 financial year increased by $834 million to $23.9 billion.
And over the last five years, premiums have increased 27 per cent per annum – a rate significantly faster than the 11 per cent average wage increase and 9.5 per cent inflation increase.
Research commissioned by the Medical Technology Association of Australia (MTAA) found that these premium hikes have seen 2 million Australians ditch cover.
The YouGov Galaxy research, released on Monday, found an estimated 2.23 million Australians no longer hold the insurance with the cost of premiums and poor value for money listed as major concerns.
To MTAA CEO Ian Burgess, the number of Aussies ditching cover also reflects health funds’ decisions not to pass on savings from medical device price cuts.
He said prices for medical devices fell 14 per cent on average in the last few years, which should have saved insurers $390 million.
“Over the past decade the ‘Big 4’ health insurers [Medibank, Bupa, HCF and NIB] increased their premiums at a faster rate than national house prices, while banking billions in profits,” Burgess said.
“This is despite the fact private health funds have not paid one extra cent for medical devices in recent years.
“Each of these two million Australians dumping their private health cover is an extra person joining our already overcrowded public hospital system.”
However, Medibank chief customer officer David Koczkar said its scheduled 3.27 per cent premium hike from April 2020 is due to increased prices for devices.
“We must do more to reduce and eliminate unnecessary costs in the health system. This includes reducing procedures that have no effect, cause harm or are not worth their cost, shifting to more out-of-hospital care, addressing out-of-pocket costs and delivering further prostheses reform,” Koczkar said.
“We can no longer ignore that we are paying up to three times the price for some medical devices in the private system when compared to the public system, or that prostheses prices in the Australian private hospital setting are amongst the highest in the world.”
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