Medibank Private has increased premiums by an average of 5.88% - an average of around $1.20 per week.
The increase comes in an environment of rising health care costs at rates around double the Consumer Price Index (CPI) due to medical technology, increasing utilisation and an ageing population.
It is the second year in a row that Medibank Private has delivered declining premium growth, slashing more than a third off the 2004 rate increase.
Medibank Private, Managing Director, George Savvides, explained that the cost of covering nearly three million members was dramatically escalating.
"In the last financial year benefits paid for a hospital treatment increased by an average of 9.7% per membership, Medibank paid out $1.7 billion for hospital services - this places incredible pressure directly on health insurance premiums.
"We have reduced premium growth for the second year in a row. In fact, almost 65 per cent of Medibank Private memberships will receive an increase of $2 or less a week.
"We made a commitment to our members that the rate of premium increases will continue on a downward trend and we have implemented a number of initiatives to be able to deliver on this promise - initiatives that will drive change, dramatically lowering our own cost base and that of the wider private health sector, now and in the future.
"Containing premiums is just half the job though, improving benefits to members is the other half of our responsibility," Mr Savvides said.
"We are pleased to announce Medibank Private is the first major health fund in Australia to offer no hospital excess for all children, across all health products, Australia-wide.
"Our focus is on continuing the downward trend in premium growth whilst adding value and ensuring health cover is sustainable for Australian families.
"No excess for children can represent a saving of as much as $1000 per hospital admission for families - this is real savings and real peace of mind.
"No excess for children will now benefit close to 300,000 families," Mr Savvides said.
AVERAGE WEEKLY INCREASES FOR SINGLE COVER (with 30% Rebate):
NAT.
VIC
QLD
SA
NSW/ACT
TAS
WA
NT
AVERAGE$1.22
$1.27
$1.45
$1.04
$1.07
$1.39
$1.09
$0.85
With 35% Rebate*$1.13
$1.18
$1.34
$0.96
$0.99
$1.29
$1.01
$0.79
*Any membership with a member aged 65-69 is eligible for the 35% rebate
** Any membership with a member aged 70 or over is eligible for the 40% rebate The premium changes will take effect on 03 April, 2006, and all members will receive letters notifying them of their rate change from early March.
Ends�
For further information please contact:
Libby Woolnough - PH: 03 8622 5181 / 0411 659 060
FACT SHEET****HEALTHCARE COSTS: THE LAY OF THE LAND
- Close to 65 per cent of Medibank Private memberships will receive an increase of $2.00 or less per week after the 30% rebate.
- Around 10 per cent of Medibank Private memberships will receive an increase of $0.50 or less per week after the 30% rebate.
- In the 2004/05 financial year Medibank Private paid a record $2.3 billion in benefits.
- Benefits paid by Medibank Private for hospital treatment on a per membership basis increased on average by 9.7% in the 2004/05 financial year.
- The average benefit paid by Medibank Private for a member having an overnight hospital stay has increased by 5.8% or $234 - from $4,064 to $4,298.
- Of all benefits paid by Medibank Private on behalf of members in the 2004/05 financial year, 74% is for hospital services, equating to $1.7 billion.
- An ageing population is a dominant factor in premium increases, the average age of Medibank Private members is 40.4 compared to the industry average age of 39.4. Even if healthcare costs remained unchanged, an ageing population would increase Medibank Private benefits by around 2.6% (nearly $60 million per year) compared to 1.8% for the industry.
- Families represent around 46% of Medibank Private's membership base - around 650,000 families and more than 840,000 children.
- No Excess for kids' represents a saving of as much as $1000 per hospital admission for families.
- Close to 300,000 families will now benefit from 'No excess for children'.
- 1 in 5 Medibank Private members received a reduction in premiums or no increase at all in 2005 - this group will still receive lower than average weekly increases after the Government rebates.