There's no doubt health insurance premiums are a necessary cost for millions of Australians. In fact, a total of 13.5 million people have health insurance in our country, according to the most recent statistics provided by the Australian Prudential Regulation Authority (APRA).
That's why it's such exciting news that a new initiative by the Government could put downward pressure on premium increases in 2017 and beyond. We've had a closer look.
What are these new plans?
Prostheses such as artificial knees and hips make up around 14 per cent of of hospital benefits paid by private health insurers. In an interesting development, health insurers discovered that they were overpaying for these medical devices by as much as $900 million following an outdated government pricing system.
In response to this revelation, the government has moved to decrease these costs. Health minister Greg Hunt described their efforts in a 4 May media release:
"In February 2017, the Government delivered price reductions to around 2,400 medical devices which will deliver around $500 million of savings over six years to patients and private health insurance members. Analysis of public and private hospital data by the Independent Hospital Pricing Authority confirms better value can be achieved for many of the 11,000 devices currently listed on the Prostheses List."
What could this mean for you?
Reports have suggested that this drop could be to the tune of $150 a year for everyone with a private health insurance policy.
If you're not going to need a hip replacement in the next decade or so these changes could still benefit you. That's because by cutting the costs of prostheses, the government will reduce the amount that health funds must spend on providing them for their customers.
A reduction in these costs will impact health insurance premiums.Reports have suggested that this drop could be to the tune of $150 a year for everyone with a private health insurance policy.
This will help keep premiums affordable, allowing Australians to get the cover they need without breaking the bank.
It's a change that should be applauded and one that consumers should take advantage of sooner rather than later.
If you're uninsured, or think your health insurance policy needs updating get in touch with an expert advisor at HICA today. We believe that insurance should be affordable for everyone – and any change to that effect is a welcome one.