Major private health insurers are threatening to increase their prices in NSW after the state government passed new laws in an attempt to force large companies to “pay their fair share” for state hospital beds.
Legislation passed parliament last night allowing the government to tax private insurers $3.27 per person per week – an increase of $1.50.
The government said the tax hike was in response to some major insurers – including HCF, NIB, Bupa and Medibank – not paying their full bills for using public hospital beds, which it said was costing the health system about $140 million a year.
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NSW passed the same legislation in 2013 under then-premier Barry O’Farrell and treasurer Mike Baird in response to a similar stand-off, leading to a deal between the government and insurers.
Treasurer Daniel Mookhey and Health Minister Ryan Park said insurers began walking away from that agreement in 2019.
“All we’re asking is that private health insurers pay their fair share of their use of public hospital beds,” Park said.
“Every day they don’t, it’s costing the state over $338,000 – every single day.”
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While several not-for-profits, including Teachers Health, Nurses and Midwives Health and Emergency Service Health, have been paying the full bed rate, the peak body for private insurers says they will be forced to increase prices in response to the legislation.
“This policy is a kick in the teeth for the millions of people in NSW who are contributing to their own healthcare in a cost-of-living crisis,” Private Healthcare Australia CEO Dr Rachel David said.
“It will make NSW the most expensive state in Australia to hold health insurance and cause more than 75,000 people to drop their insurance next year.”
Private Healthcare Australia said premiums will rise for four million people next year as a result of the legislation – by $78 for individuals and $156 for families.
But Mookhey said insurers have no reason to pass on the costs to customers.
“Premiums didn’t go down when the big insurers stopped paying their bills,” he said.
“They shouldn’t threaten families with an increase now. The big insurers can still resolve this impasse by simply paying their bills.”
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