Australian health insurance holders will see new changes to their health funds come into effect this April, with premiums set to rise this year.
According to a report from the Australian Bureau of Statistics, the Consumer Price Index (CPI) rose 0.2 per cent in the December quarter of 2012, with the health group rising 7.7 per cent over the 12 months to December.
The report released on January 23 revealed that the main contributors to this rise over the year were medical and hospital services (up 9.4 per cent), pharmaceutical products (5.4 per cent) and dental services (3.4 per cent).
The rise of health related costs can contribute to the increase in private health insurance premiums, with the expense of medical equipment and technology, costly procedures available through private hospitals and hospital staff wages among some factors.
Before health funds proceed with increasing their premiums, they must submit 'detailed' financial information to the minister for health and ageing as part of the Private Health Insurance Act 2007.
No changes will be made to the premium if the health fund is unable to supply sufficient information to the minister to establish that an increase is necessary.
Minister for health Tanya Plibersek confirmed on February 8 that she had approved the private health insurance increases come April, with this year's average rate of increase 5.6 per cent.
"This amounts to about $1.70 a week for a single person with cover, and about $3.70 a week for your average family with top cover," Ms Plibersek said about the premium increases.
"It comes at a time when the insurers have been paying out a great deal more, so the average payment out has increased by around 9.3 per cent for insurance companies. So they are contributing a lot more back to members than they have in previous years."
With the impending premium increases set to take effect in over a month's time, Australians with private health cover are being encouraged to compare their health insurance policies to find a plan that best suits their medical and financial needs.
"It's also important to say that we believe that the private health insurance industry is a very competitive one," Ms Plibersek said in Sydney press conference.
"It's very important that people shop around and compare their private health insurance policies."