Govt can stop health insurance hike: Labor

A hike in health insurance premiums that could cause hundreds of thousands of Australians to drop their private cover doesn’t have to happen, the federal opposition says.


From April 1 premiums will rise on average by more than 5 per cent, or around $200 a year for a family.

A Galaxy poll commissioned by comparison service iSelect suggests 71 per cent of those with private cover are planning to take some form of action, and 530,000 may drop their policy altogether.

Acting Labor leader Tanya Plibersek said when she was health minister, private health insurers put up “ambit claims” to her, but she sent them back to reconsider.

“That meant on average, under Labor, under both (fellow former health minister) Nicola Roxon and I, premium increases were below the averages that we’re seeing under Liberal governments,” Ms Plibersek told reporters in Sydney.

“The health minister does have the power to reject increases and the government needs to consider what happens to people who have private health insurance when it becomes unaffordable.”

The Galaxy survey of over 1000 Australians was commissioned after the federal government’s March 2 announcement that premiums would rise by an average 5.59 per cent.

The survey findings suggest 46 per cent of Australians intend to shop around to ensure the best deal, while seven per cent plan to switch provider.

iSelect spokeswoman Laura Crowden said couples and families with either hospital-only cover or extras-only cover indicated they were more likely to cancel their private health insurance altogether.

“It’s possible these households have already pared back their cover as premiums have risen in recent years, but this latest increase may be the tipping point that means they can simply no longer afford it,” she said.

Around 12 million Australians have private healthcare insurance, and a large portion of the policyholders are over the age of 50.