HCF announces average premium increase
Sydney, 27 February 2015 - Australia's largest non-profit private health insurer, HCF, has announced an average premium increase of 6.57%, to take effect on 1 April 2015.
Health Minister Sussan Ley today announced premium increases for all private health insurers. HCF said its increase was unavoidable in light of continued increases in health and medical costs well above inflation, which have affected claims over the past year. HCF paid out $2,066 million in benefits - hospital and ancillary – in the 2014 financial year, an increase of 9% or $175 million on 2013 figures.
Since 2011, the cost of hospital, medical and prosthesis benefit payments has increased by more than 50%. This is the compounding effect of both increasing hospital costs and increasing admissions.
Overnight private hospital admissions for stomach procedures, for example, have more than doubled since 2011 and the average cost of treatment has also increased by 11%. Admissions for a total knee replacement have increased by 42% and the cost of treatment has also increased by 7%.
“Value for money is central to HCF’s member proposition and we have worked hard to keep the increase in premiums across all our products as low as possible for 2015,” Mr Larkin said.
“It should be noted that the average premium increase announced today is sigificantly lower than the 9% increase in claims we experienced in the 2014 financial year,” he said.
With more than 1.5 million members, HCF continues to perform well on standard industry benchmarks for efficient operations and member value. In FY 2014, HCF returned 93 cents out of every premium dollar received back to members in the form of benefits, well above the average of 87 cents for all other funds. Its ratio of management expenses to premium income - 7.1% - was significantly lower than the industry average of 8.8%.
