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Transcript of press conference: Sydney: 8 February 2013: private health insurance premium increases

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Press Conference, Sydney Private Health Insurance Premium Increases 8 February 2013

Tanya Plibersek: Well thanks for coming out this morning everyone. I just wanted to report to you that I have approved the private health insurance increases. The private health insurers obviously go through a process with the Government each year in setting their rates for the following year, and this year the average rate of increase in the cost of private health insurance is 5.6 per cent. This amounts to about $1.70 a week for a single person with cover, and about $3.70 a week for your average family with top cover.

Question: These changes combined with the ones in July, there's a claim in the paper that, you know, some insurance premiums will go up by around $1875. Is that right? I mean, [indistinct] those other changes.

Tanya Plibersek: Look, the insurers vary quite a great deal from product to product. The average increase will be around $3.70 a week. That's about the cost of a cup of coffee. It comes at a time when the insurers have been paying out a great deal more, so the average payment out has increased by around 9.3 per cent for insurance companies. So they are contributing a lot more back to members than they have in previous years.

We've got historic high rates of membership of private health insurance, so the private health insurance industry is very strong, and many Australians have chosen to take out private health insurance in the last year.

It's also important to say that we believe that the private health insurance industry is a very competitive one. It's very important that people shop around and compare their private health insurance policies. There can be a difference of as much as $200 a month in the rate of top cover. So if you look at the graph that I've handed out today, you'll see that a similar product - in fact exactly the same product - can cost as much as $200 a month less if you shop around.

Question: Nobody really likes, you know, obviously having to pay a bit more, cost of living pressures all that sort of thing. But how do these - how do this - how does this rise compare to previous rises?

Tanya Plibersek: Well when Tony Abbott was Health Minister one year, the rise was almost 8 per cent, and the average was around 6.5 per cent. So the average under Labor has been much lower than the average under the previous Government.

We are very keen to ensure that private health insurance remains competitive. We are keen to keep cost pressures down.

And I really do urge people who have private health insurance, it's very easy to compare and contrast. In fact, there's a great website,, you can very easily compare the private health insurance policy you have with the same policy or similar policies from other companies, and you can save hundreds of dollars a month.

Question: Despite the increase in payouts by these funds, they are said - their profits are said to have gone up by around 23 per cent, I think it was, over the past year. Is it difficult then for the public to see that this is justified?

Tanya Plibersek: Well private health insurance profits are strong, and their capitalisation is strong. It's quite important that the private health insurers have strong capitalisation, we don't want companies falling over. What we want is a balance, however, with rights for consumers. And with this increase, you're seeing a $1.70 a week if you're a single, $3.70 a week if you're a family on top cover, lower average increases than under the previous Government. I think this is a good result.

Question: What do you say to people facing the combined effect of the 5.6 per cent increase, and of losing the 30 per cent rebate?

Tanya Plibersek: Well the 30 per cent rebate is obviously something that is dependent on people's income. If you've got people who are high income earners, it's not fair that people on low incomes are subsidising their private health insurance. We made that decision because private health insurance it the fastest growing area of health costs to the Government.

Now, I want to pay for new medicines, I want to build new hospitals, I want to see new hospital beds opening, I want to train more doctors, I want to train more nurses. There's a great deal to do in our health system. We can choose to pay very high subsidies for private health insurance, or we can choose to invest some of that money back into our health system to build a stronger health system.

Question: So you're confident, Minister, that we won't see, sort of, a big exodus of hundreds of thousands of people from private cover?

Tanya Plibersek: I'm absolutely confident that we'll continue to see strong membership within private health insurance. Membership rates are higher than they've ever been, the private health insurance industry is very strong, a lot of Australians continue to take out private health insurance for the first time. This is a modest price increase and I'm sure that it will continue to see growth in the private health insurance industry.

Question: Just on one other matter, you've been having a bit of a [indistinct] with the Victorian Health Minister over funding. Do you see any resolution in sight to that?

Tanya Plibersek: You know what, Commonwealth funding to Victoria goes up $900 million over the next four years. It went up about $200 million between last year and this year. Despite the fact that we continue to put more into the Victorian health system than ever before, their numbers have been going backwards. Their emergency waiting times are getting longer, their elective surgery waiting times have been getting longer. Their elective surgery waiting lists are higher than they've ever been, and 7000 more than when Ted Baillieu took office.

We've been giving the Victorian Government more every year and they're doing worse. We give them more, they do worse. I'd really like to know what they're doing with the extra Commonwealth investment.

Question: So I take that as a no, you don't see an end in sight?

Tanya Plibersek: Well I'm very keen to work cooperatively with the hospitals in Victoria. What I would say is the Victorian Government's had an unexpected windfall of almost $300 million of GST money, $67 million in this year. They should use that for their health system. They've cut $616 million from their health system, and over the last two years you've seen healthcare for Victorians sliding backwards. I don't think Ted Baillieu gets to point the finger and look for someone else to blame when they have so incompetently managed their own health system.

Compere: Okay last question.

Question: Minister, are you concerned that many of those taking out private health insurance now are taking general cover that has exemptions and are still getting the tax rebate?

Tanya Plibersek: Look, I think people need to get the cover that's most appropriate for them. But hospital cover is really important from our perspective as a Government. Thanks.

Question: So will you [indistinct].

Tanya Plibersek: [Interrupts] Thanks. Thanks everyone.