Private health insurers are continuing to rake in bumper profits, even as more Australians are being forced to abandon their coverage because of record out-of-pocket costs.
The latest Australian Prudential Regulation Authority figures show the insurers took in more than $24 billion in revenue from premiums in the year to September 2018 but paid out only $20.4 billion in benefits.
That means the insurers are pocketing $3.6 billion more than they’re paying out in benefits.
And that means that each of the 13 million Australians with private health cover shelled out $277 to the insurers that was not returned in benefits.
The industry remains highly profitable, with net profit after tax coming in at $1.41 billion for the year to September 2018. The industry’s assets have increased by $491 million in the last 12 months to $14.1 billion. But another 5,256 people ditched their hospital cover in the September quarter – meaning the population covered has slipped another 0.2 per cent to 44.9 per cent.
Both hospital treatment and general treatment benefits were down in the September quarter compared to the June quarter – despite an average 4 per cent premium rise earlier this year.
Average out-of-pocket costs were also up once again, with the average gap payment for a hospital episode now up to $302 – an increase of 1.2 per cent.
The industry is also spending more on management expenses – like trips to Portugal – up from 8.89% to 8.97% of revenue.
And maybe Scott Morrison’s ‘muppet show’ government should focus less on tearing itself apart and more on making health care more affordable for Australians.
Under the Liberals, premiums have increased by 27 per cent since 2014 – costing families an average $1,000 more. When will this smug, out-of-touch and illegitimate Prime Minister do something to help people struggling with these costs?
These figures show yet again why Labor’s plan to improve affordability – by capping premiums and ordering a major review of the industry – is needed.
Labor will cap premium price increases at 2 per cent for two years, delivering families an average saving of $340 and shifting the balance back in the favour of consumers rather than company executives.
Importantly, Labor will ask the Productivity Commission with a major review to identify long-term sustainable ways to bring down costs and improve quality.
Catherine King MP, Shadow Minister for Health