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Private health insurance premium rises imminent.

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Stephen Smith MP Member for Perth Shadow Minister for Health and Ageing

13/2003 Thursday 13 March 2003


Reports that the Howard Government is about to announce yet another average 7% increase in the cost of private health insurance premiums show that the Howard Government has failed to protect consumers from the rising costs of health care and has broken its election promise that private health insurance premiums would fall.

A further 7% premium increase will cost many families with private health insurance an extra $150 to $250 each year on top of the already substantial increases approved by the Howard Government since it was re-elected in November 2001.

In the run-up to the 2001 election, Prime Minister Howard said that his Government’s policies would “lead to reduced premiums” and that private health insurance would be “more affordable and attractive” to consumers.

This year’s further premium increases will again make a mockery of those promises.

Since the election in 2001, and contrary to the Prime Minister’s promise, health insurance premiums have only being going one way - up.

This time last year, the Government announced average premium increases of 7%, seeing many Australian families with private health insurance slugged an extra $150 to $250 each year.

For some fund members, the increases were even more substantial: • a 36% increase for some IOR Australia members; • a 32% increase for some Australian Health Management fund members; • a 32% increase for some GMF Health fund members; • an 18% average increase for HBF's Western Australian members; and • a 16% increase for Medibank Private's most popular package 'AdvantagePlus'.

Then, in the shadow of the anniversary of September 11 last year, the Howard Government announced that private health premiums would automatically rise by CPI every year, without the need for Government approval - costing families an extra $50 to $100 each year.

This broke the Prime Minister’s “absolute guarantee” and “honest guarantee” that his Government would approve all future private health insurance premium increases.

In December last year, again with the Government’s approval, Medibank Private ended its discounts for early and regular payments - leaving more than 2.7 million Australians paying another $100 to $150 each year.

As the experience of 11 September last year demonstrates, this Government has a practice of announcing private health insurance premium increases when the country’s attention is focussed on other things.

It seems that this year’s premium increases - which are expected to be announced as soon as tomorrow - are no exception.

Australian families with private health insurance are now under greater financial pressure than before, despite the promise by the Howard Government that its policies would see their premiums reduced.

Media Contact: Andrew Dempster 0407 435 157