What’s in your insurance company?
Insurance industry officials are set to release their annual report on insurance market trends next week, and it’s likely the biggest surprise in the report is that the number of people insured in the market is at an all-time low.
“This year’s Insurance Industry Review will give us a snapshot of how insurance market fundamentals are changing, and we will provide our views on the challenges we face to ensure we can continue to deliver the best value for Australian consumers,” the Insurance Industry Council said in a statement.
“We know that there are many Australians with significant health and safety concerns, and that the current market structure and the risk sharing arrangements for the health industry are not working for the vast majority of consumers.”
“It is vital that the Australian Government provides a framework for insurance providers to deliver affordable, high-quality, accessible health services,” the group added.
In an industry statement on Monday, the Australian Competition and Consumer Commission (ACCC) said insurers have failed to provide consumers with a “full, fair and timely” price for health insurance.
“There is a need for consumers to be able to compare their current health and health care costs with what is likely to be a fair and accurate cost for their health,” the statement read.
The ACCC is seeking changes to the existing rules for health insurers to ensure they can continue offering consumers a fair price for insurance.
The ABC’s consumer affairs program Marketplace revealed last year that the average premium for a one-year policy on the Australian Health Insurance Scheme (AHIS) was $5,800 and the average annual out-of-pocket premium for an Australian covered by AHIS was $8,400.
The AHIS is the primary means of covering Australians who are over 65.
The premiums for the private health insurance plans covered by the AHIS are calculated by dividing a person’s annual income by their age, and a one per cent premium is payable for every extra $1 over this threshold.
The average premium on the AHES was $6,600 in the year to February, compared to $10,100 in the same period last year.
The ACTC has been pushing for a price floor in the AHIs for at least two years, with a $10 minimum premium and $40 per person per year for a maximum of five years.
Under the current system, a benchmark premium of $10 is set for individuals, and the minimum amount of money an individual must pay out of pocket for health care is $10 per person, per year.
A price floor is an attempt to get insurers to compete against each other and offer lower prices to ensure more people are covered, but it is not likely to pass because insurers are likely to negotiate their own premiums.
“This will only work if insurers offer more affordable health care services,” Ms Leong said.
The ACCCs warning comes ahead of the release of the next major report on the insurance industry, the State of the Insurers’ Business in Australia Report.
The report is due out next week and is expected to be the most comprehensive assessment of the state of the market since the release in 2013 of the Insurance Council of Australia’s (ICA) State of Business report.
The ACA will also be released at the same time, along with a range of industry policy papers.
Topics:health-policy,business-economics-and-finance,industries,health,health-care-facilities,public-sector,government-and topprojects,australia,united-statesFirst posted January 27, 2018 06:47:08More stories from New South Wales