Medibank Private today announced that premiums will rise by a below-industry average of 5.74% - around $1.40 per week - driven by the economic climate and increased health costs.
Medibank Private Public Affairs Manager, Sarah Chibnall, said that with the fund's health costs running at 9% and utilisation continuing to climb, the 5.74% change was a responsible outcome in the current global economic environment.
"Medibank is endeavouring to shield members from the full impact of rising costs through responsible management and smart purchasing of health services. With global economic conditions producing investment losses and a slowdown in membership growth, 5.74% represents a prudent balance between ensuring we can cover the costs of claiming and keeping health insurance affordable," Ms Chibnall said.
"The benefits paid on behalf of our members amounted to $2.9 billion last year. This is a 9% or $260 million increase which is considerably more than our premium rise.
"Additionally, when you compare our figure to the more dramatic rises in health costs, including the Australian Institute of Health and Welfare's determined 7% growth in health expenditure per person, our efforts to protect members from the full brunt of increasing costs are demonstrated.
Ms Chibnall acknowledged that Medibank understood the current pressures on household finances but stressed the value of access to health services and protection against unexpected costs.
"It's a tough year for businesses and families alike, and the last thing that people need is a surprise hit to their budgets in the form of a hefty bill because they dropped their health cover.
"For Australians to maintain their private health insurance they have to be able to manage the cost, so it's not in our interest to put premiums up unnecessarily. But we do need to be financially responsible and we have to be able to pay for medical treatment and services when our members need us.
"Last year we paid 149 claims that each cost over $100,000, and even some of the most common hospital procedures we pay benefits for can cost upwards of $5,000. Having a baby, for example, can cost $10,000, and the average cost for a knee replacement can be over $19,500.
"Our members are seeing value in their health insurance. Last year we paid claims on over 800,000 hospital admissions, and our extras benefits were used on over 17 million occasions.
"We are not going to compromise the quality and benefit entitlements in our health cover. In fact, this year, we have announced improved member benefits; improved excess structures; and removal of the individual member limit for package bonus claiming. Also, recognising the difficult economic times, we will be introducing new cover designed to better fit the needs and budgets of members.
Medibank members who have lost their homes in the Victorian Bushfires are exempt from paying premiums until 30 June, 2009.
For further information please contact: Sarah Chibnall
Tel: 03 8622 5181 | Mob: 0423 762 676 | email: sarah_chibnall@medibank.com.au