Yahoo Finance Bupa, Medibank, HCF: Health insurers accused of ‘jacking up’ prices
CHOICE has revealed the “sneaky tactics” health insurers are using to hike their prices.
Australia’s biggest health insurers have been called out for increasing their top-tier hospital policy prices by more than 30 per cent, as consumers brace for yet another insurance price hike.
Consumer advocacy group CHOICE found that health insurers, including Bupa, Medibank, HBF, HCF and NIB, had increased their premium hospital cover at a much higher rate than the federal government's approved averages.
Health insurers are legally allowed to increase their premiums once a year from April 1, with approval from the health minister.
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“Health insurers can only increase premiums once a year, but at any time they can close policies to new members and release new, more expensive policies that offer basically the same cover but with a slightly different name,” CHOICE health insurance expert Jodi Bird said.
“Our analysis shows several insurers are using these sneaky tactics to jack up the prices.”
Over the past three years, average health insurance premiums went up by 8.6 per cent across all levels. However, CHOICE found the cost of top-tier Gold hospital policies available to new customers had increased by between 34 and 47 per cent for the five biggest insurers.
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Medibank’s Gold cover, for instance, has jumped by 43 per cent for new customers since February 2021, while Bupa’s Gold cover has increased by 35.3 per cent and HCF’s has increased by 34.4 per cent.
Gold tier hospital cover is the highest level of cover available to consumers and includes cover for treatments like pregnancy and birth, and joint replacements.
Private Healthcare Australia boss Rachel David has disputed CHOICE’s claim that insurers were using a loophole to charge more.
"The reason that top hospital cover increases in price more is because it covers more expensive health interventions,” David told the ABC.
"[It's] not because of the health funds, but because the costs of health care are going up, and health care costs have been just as impacted by inflationary pressures as any other part of the economy."
How much are health insurance premiums going up?
This hasn’t been confirmed just yet. Health minister Mark Butler is expected to announce the annual increase to health insurance premiums in the coming weeks. This will kick in from April 1.
In December, Butler rejected the industry’s proposed premiums hikes believed to be as high as 6 per cent so customers can expect a smaller hike than this. Butler told insurers to “have another go and put forward a more reasonable figure”.
More than half of the Australian population - about 13.6 million people - have private health insurance. Last year, average premiums rose by an average of 2.9 per cent in April however, a number of insurers opted to defer the rise until later in the year.
Bird recommended consumers regularly evaluate their health insurance to ensure it is still right for them and to shop around.
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