APRA releases Q4 2021 private health insurance statistics

The largest increase in coverage during the quarter was 12,451 for people aged between 75 and 79, while the largest net increase after considering movement between age groups was for the 0- to 4-year-olds with a rise of 24,834.

Meanwhile, for general treatment, 14,102,981 people or 54.7% of the population had some form of general treatment cover for Q4 2021, an increase of 79,088 people compared to Q3 2021. It also saw an increase of 76,564 people with general treatment (ancillary) coverage, with the largest net increase in coverage after accounting for movements across age groups totalling 26,647 for people in the 0 to 4 age group.

During the same period, insurers paid $3,996 million in hospital treatment benefits (5.2% lower compared to Q3) and $1,496 million in general treatment (ancillary) benefits (32.3% increase from Q3. By contrast, total benefits for medical services decreased by 6.9% during Q4 compared to Q3.

Read more: APRA releases private health insurance statistics for September quarter

In full-year 2021 (FY21), the PHI industry reported a profit of $1.8 billion, a dramatic improvement from the $558.8 million reported in the previous year (FY20).

According to APRA, the increase in profitability in FY21 was driven by the recovery in insurance profits and investment income following the weak margins and investment returns during the height of the COVID-19 pandemic in 2020.

Meanwhile, the PHI industry’s premium revenue jumped by 5.8% during the same period, thanks to a combination of membership growth and premium rate increases. By contrast, claims growth fell due to various COVID-19 restrictions across Australia throughout the year that impacted movements in insurers’ Deferred Claims Liabilities (DCL).

With these factors, gross and net margins increased in FY21 compared to FY20 to 17.2% and 7.7%, respectively.

Members Health Fund Alliance (Members Health), the peak body for 26 of Australia’s not-for-profit and member-owned health funds, said the latest figures reflect Australia’s ongoing confidence in PHI.

“This is the sixth consecutive quarter of growth and is a huge vote of confidence in private health insurance,” said Members Health CEO Matthew Koce. “Australians clearly value the access and high-quality care they have with private health insurance.”

Koce also noted that the latest APRA PHI figures are a timely reminder of the strengths of Australia’s mixed private-public health care system.

“More people with private health insurance also eases the strain on our public hospital waiting lists,” he said. “The increased number of people turning to the private health system is a vote of confidence in insurers, hospital operators, and most importantly, the frontline health workers who provide outstanding care to their patients.”