Health Minister Mark Butler has rejected the health insurance industry's request for a 6% rise in premiums, marking the largest increase in at least six years.
The annual negotiations with 31 insurers sought approval for the proposed hike, potentially impacting 55% of Australians with hospital or extras cover.
Addressing concerns over the rising cost of living, Butler directed insurers to reconsider and propose a more reasonable figure, considering their record profits.
The government emphasises the need for justified and proportionate premium increases and believes the industry can afford smaller hikes based on its substantial net profit.
Despite the pandemic's impact on claims, insurers face challenges from rising healthcare costs, prompting discussions on the need for efficient spending and addressing medical device costs.
The approved premium increases, effective April 1, 2024, aim to balance affordability for the 14.7 million Australians contributing to private health insurance.