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2008 private health insurance premium round: Minister seeks further assurances.



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THE HON NICOLA ROXON MP

Minister for Health and Ageing

MEDIA RELEASE

28 February 2008 NR 08/25

2008 private health insurance premium round: Minister seeks further assurances

As Health Minister I have an obligation to examine annual applications from health insurers for premium increases. Under legislation, it is my duty to assess if these applications are in the public interest.

Given the impact increases can have on working families under financial pressure, I am determined to fulfill this obligation thoroughly.

When it comes to cost pressures on working families, the Rudd Labor Government will not take the tick and flick approach of the previous government.

In deciding whether or not premium increases are in the public interest, I will consider factors such as the size of an increase (I note, for example, that the health services index for the year to December 2007 is 4.8 per cent), the industry average, market share, membership forecasts, the price of competitors’ products, other insurers’ increases, the effect on the PHI rebates and the financial circumstances of the insurer.

I am concerned about the applications by several health funds for rises that may be larger than necessary.

Whilst I have approved a large number of applications that I have assessed this week I have also written to a number of private health insurance funds requesting that they review their applications to ensure their increases are as low as possible.

I have taken this unusual step because of the importance the Government places on finding any sustainable way to reduce growing pressures on family budgets. For many families, increases in health insurance premiums make things even more difficult.

I have asked any insurers who find, in the course of reviewing their applications, that they are able to submit a lower request to contact my department.

For any insurers who argue they are not able to reduce their premium applications, I have sought clear evidence of the circumstances that make it necessary for their proposed increase to remain at its current level.

While all applications will be considered on their own merits, I am determined that premium increases should be the minimum necessary to maintain capital adequacy and solvency requirements.

In order to deal with these applications as quickly as possible I have asked the funds to respond by the end of this week.

Media contact: Sean Kelly - 0417 108 362