The directors of two of Australia's private health insurance providers have spoken out against the approval process required for health fund premium rises.
Speaking to The Australian yesterday (April 3), Medibank Private chairman Paul McClintock questioned the role of health ministers in approving health fund premium rises.
According to Mr McClintock, it was unacceptable that the process of approving premium rises was performed by the health department, rather than an independent regulator against a set of stated criteria.
"We really should commit to ensuring this most recent round was the last run on this basis," he said in a speech to company directors yesterday.
Mr McClintock urged insurance industry leaders to come forward and address the "bad regulation".
nib managing director Mark Fitzgibbon responded to these concerns today (April 4), telling News Limited that the process was "blunt and unsophisticated" and created uncertainty in the industry.
Mr Fitzgibbon suggested that the ad-hoc nature of the premium rise approvals – which he believed was simply based on comparing a fund's premium rise bid to the industry average –
increased the risk of a politically motivated decision.
The average premium increase of 5.06 per cent approved by the federal health minister Tanya Plibersek came into effect on April 1.