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Health Minister Greg Hunt clears way for health cover premium hike

Newly-appointed Health Minister Greg Hunt outlines his priorities for the role while visiting Frankston Hospital in January.

Newly-appointed Health Minister Greg Hunt outlines his priorities for the role while visiting Frankston Hospital in January. Photo: AAP

Malcolm Turnbull wants Australians to stick with private health cover despite his government approving a hike that will cost families up to $200 extra a year.

While the average 4.84 per cent increase is the lowest in 10 years, the cumulative impact over that time is about 50 per cent – three times the rate of inflation.

But it could have been worse, the government and insurers claim.
Changes in what health funds pay for hip and knee replacements and other prostheses had kept a lid on costs.

The prime minister says the increase means singles will pay an extra $2 a week while it will cost families $4 more.

“My counsel would be that people should stay in private health insurance,” he told 3AW’s Neil Mitchell on Friday of the near 13 million Australians with cover.

Health Minister Greg Hunt, who approved the latest hike, acknowledged cost-of-living pressures were a major concern.

He plans to work with private health insurers to find ways to deliver more value without compromising the quality of cover.

“I have already made this clear to the insurance companies and received a commitment that they will work to that end,” he said.

Labor health spokeswoman Catherine King said the latest increase follows some of the highest premium hikes on record, spiralling complaints against insurers and Australians increasingly discovering they were not covered for basic inclusions.

Private Healthcare Australia chief executive Rachel David said no-one liked to see premiums go up but insisted fund members continued to get value for money.

The 4.8 per cent rise was necessary to ensure funds stayed ahead of rising costs and had enough to cover what they were expected to pay for in the next 12 months, she said.

Consumer group Choice said the latest price hike might be justifiable for providers but that did not mean it was affordable.

“What we’re seeing at the moment is people reconsidering their coverage, people dropping out, and unfortunately people downgrading into what we call junk policies,” spokesman Tom Godfrey told ABC radio.

“Private health insurance at the moment for a lot of people is a pretty bad deal.”

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