Australians with private health insurance can expect to pay more in premiums starting from tomorrow. The government has approved an averaging price hike of almost 4 per cent. But insurers are using a loophole to raise prices by almost 35 per-cent in some cases, sparking some serious financial distress for some consumers.
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00:00Growing up, Judy Giddings loved to play sport, but it came with hurdles.
00:08This is me before my horse riding accident, and probably about the last time I smiled
00:17with my mouth open.
00:19Major dental work is only covered under the most comprehensive health insurance policies,
00:25meaning Judy has no choice but to pay for top-tier cover costing nearly $3,000 a year.
00:31If I wasn't still working, I would not be able to afford it.
00:36From Tuesday, private health insurance companies will raise premiums across all levels of cover.
00:41The government has approved an average hike of 3.7% weighted across all policies.
00:48Consumer Group Choice has found among the top five insurance companies, basic cover
00:53will rise on average by 0.78%, bronze by 2.5%, silver by 3.2%, but premiums for gold
01:02policies, the most comprehensive, will spike by nearly 12.6%.
01:08For individual policyholders, it is completely meaningless.
01:11Gold policyholders could be having a 9, 14% increase, and some people can even have no
01:17increase or go backwards.
01:18The approved increase also does not affect the price of new policies.
01:23The loophole has allowed health funds to close and reopen almost identical policies at a
01:29higher cost.
01:31Health Minister Mark Butler has ordered his department to investigate ongoing phoenixing
01:36by health funds and says it's shameful it's continued.
01:39HCF says it had to close its former gold policy to improve its financial sustainability.
01:46That means the overall composition of the policyholders is going to be much older and
01:50more expensive to cover for.
01:51Tough choices ahead for Australians facing unaffordable health care.