Health Minister Rejects Premium Hike Proposals


Federal Health Minister Mark Butler rejects private health insurers’ request to increase premiums by up to 6 per cent, asking them to reconsider and submit more reasonable figures. Insurers attribute the proposed increases to inflation and rising patient claims.

Mark Butler’s Rejection of Premium Hike Proposals

Federal Health Minister Mark Butler has utilized his legislative powers to reject private health insurers’ proposed premium increases of reportedly up to 6 per cent, stating that the proposals were not justified or proportionate. He has directed insurers to submit more reasonable figures, considering their record profits and the declining proportion of premiums returned to customers, amidst household budget pressures. Insurers have until late January to resubmit their proposals.

Insurers’ Response and Factors Affecting Premium Increases

Private Healthcare Australia’s chief executive Rachel David stated that insurers’ proposed increases were motivated by inflation and a significant surge in hospital admissions funded by insurers, with the cost of medical and hospital services increasing by 5.9 per cent and a 9.6 per cent rise in hospital admissions. She also highlighted the impact of high inflation rates on the health sector and called for pricing reform for the purchase of generic medical devices, which she claimed are currently priced at significantly higher rates compared to other countries.

Private Health Insurance Landscape in Australia

With nearly 15 million Australians holding private health insurance, the cost is partly subsidised by taxpayers through the private health insurance rebate. Additionally, taxpayers above a certain age and income level face a tax penalty if they do not opt for an ‘appropriate’ level of insurance. The Australian Medical Association (AMA) has criticized the private health industry for reducing rebates and benefits paid out to patients despite higher insurer profits, indicating a decline in the value received by consumers relative to insurer profits. The Australian Competition and Consumer Commission found that private health insurance profits more than doubled in 2022-23 compared to the previous year.