Private health insurance sector sees record growth – APRA
Private health insurance sector sees record growth – APRA | Insurance Business Australia
Insurance News
Private health insurance sector sees record growth – APRA
In which areas have increases been observed?
Insurance News
By
Jonalyn Cueto
The Australian Prudential Regulation Authority (APRA) has released its Quarterly Private Health Insurance Membership and Benefits Summary for June 2024, presenting an overview of the current condition of the private health insurance sector in Australia.
As of June 30, 12.24 million people, representing 44.8% of the population, had hospital treatment cover, reflecting a slight decrease from March 2024. June quarter saw an overall increase of 63,976 insured individuals compared to March 2024.
Family policies grew by 8,688, while single policies rose by 17,197. The largest demographic increase was among individuals aged 30 to 34, with an addition of 13,887 members.
The general treatment membership also saw an uptick, with the number of insured persons rising from 14.57 million in June 2023 to 14.88 million in June 2024. This indicates a positive trend, albeit with varying growth across different age groups.
In terms of financials, hospital treatment episodes and general treatment services both showed moderate increases over the year. Hospital treatment episodes grew from 4.77 million to 5.01 million, while general treatment services increased from 100.55 million to 103.77 million, representing an upward trend in service utilization.
When examining the benefits paid, the report indicated that $18 billion was allocated for hospital treatments, marking a slight increase from $16.7 billion in June 2023. General treatment (ancillary) saw a marginal rise from $6 billion to $6.29 billion. The out-of-pocket costs also increased, with hospital treatment averaging $57.98 per episode, up from $57.04.
Regarding Lifetime Health Cover, the number of adults with a certified age of entry of 30 (without penalty) rose by 113,873. Meanwhile, the number of individuals subject to a penalty increased by 66,787, signalling continued engagement with the private health insurance system across different age brackets.
Overall, the report highlighted a stable yet cautious growth within Australia’s private health insurance sector.
Increases in various areas
Adding to these findings, new data shows private health insurer funding for private hospitals reached an all-time high, with payments surging by 8% over the past year. This increase is attributed to more Australians opting for private hospitals to access care quickly, including elective surgeries. Payments now stand at 117% of pre-pandemic levels, reflecting a strong rebound in private hospital activity after a sluggish period from 2020 to 2023.
With nearly 14.9 million Australians currently holding some form of health insurance, the sector is under pressure to manage rising costs.
Dr. Rachel David, CEO of Private Healthcare Australia, highlighted that health funds paid a record $2.4 billion for generic medical devices, marking an 18.8% increase since 2019. However, she warned that this expenditure, alongside other rising costs, could lead to higher premiums.
“Despite strong growth in health insurance membership for four years, we know many Australians are struggling to pay their premiums. Some are barely holding on,” David said.
“We need to reduce wasteful spending and take meaningful action to put downward pressure on health inflation, so health insurance remains affordable now and into the future.”
Do you have something to say about the latest statistics? Let us know in the comments below.
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