Why your health fund premiums are rising again
Exclusive: Eight in ten health fund members are with insurers that are raising premiums in excess of the 2.9 per cent industry average announced on the weekend.
A News Corp investigation has found the three biggest funds - Medibank, BUPA and HCF - which cover two in every three health fund members have all announced average premium rises over 3.25 per cent.
Only nine of the nation's 35 health funds have announced premium rises at or below the industry average of 2.9 per cent.
Health Minister Greg Hunt boasted on the weekend next year's premium rise will be the lowest in 19 years.
However, questions are being asked about how the average premium rise figure is calculated.
Especially as one fund, MO Health is raising premiums by on average 5.63 per cent and two others - Westfund and Mildura health - are raising premiums by over 4 per cent.
Five years ago 25 of the nations 35 funds came in under the average, in 2015 only 12 funds did so and this year just nine funds, mostly smaller ones, are at or below the average rise.
Premium rises are usually much higher than average for people who have top cover products and lower than average for so called junk insurance which only covers people in public hospitals.
The Department of Health says it has not changed the approach it takes to calculating private health insurance premiums changes.
"All relevant information provided by insurers in their premium round applications which will have an impact on premium changes for consumers is taken into account when calculating the insurer and industry averages," a spokesperson said.
"This includes the effects of recent reforms such as age-based discounts, which are lowering the premiums for eligible policy holders," the spokesperson said.
From April health funds have been able to offer discounts of up to 10 per cent to members under the age of 25 but these apply to just 380,000 of the nation's 13.6 million health fund members.
Choice Health spokesman Dean Price said it was time for a full public review of private health insurance.
"The average doesn't mean a lot to people when their individual policies are going up by more than average," he said.
Medical Technology Association of Asutralia CEO Ian Burgess said there was "no justifiable reason" why big corporate insurers such as Medibank and Bupa were raising premiums higher than last year's industry increase (3.25 per cent).
Mr Burgess said any concerns over the premium process could easily be addressed with a quick external assessment by the Federal Government's independent Auditor-General.
"Private health insurers have not paid one extra cent for medical devices over past two premium years, while banking $1 billion worth of profits, and yet here they are again raising premiums twice the rate of inflation," Mr Burgess said.
"It just doesn't add up and the public and parliament need independent assurance private health customers won't be stung with higher-than-promised out-of-pockets before prices rise next year."
Opposition health spokesman Chris Bowen said "Greg Hunt "demanded" insurers stay under 3 per cent for the next round of premium rises, but the reality is the minister has allowed the lion's share to rise by over 3.25 per cent.
This increase is higher than inflation and higher than wages growth. It's deeply concerning that under this Government premiums have risen by 33 per cent on average and the average Australian family is over $1,000 worse off.