The head of the agency charged with advising the government on private health insurance premium rises says the industry is in "pretty good nick," despite the Abbott government recently signing off on the largest premium rise in almost a decade.
Shaun Gath, the chief executive of the Private Health Insurance Administration Council, was speaking at an event in Canberra on Thursday to mark the 30th anniversary of Medicare.
In December, Health Minister Peter Dutton approved an average premium increase of 6.2 per cent, the biggest increase since 2005. The increases, which take effect from April, will add about $150 a year to the cost of a basic family policy, while a single person will pay about $100 a year more.
The latest data from the council shows the industry collectively made an after-tax profit of more than $1 billion in the 12 months to September 2013.
Revenues were up 6.5 per cent for the year, to $18.9 billion, but the total benefits paid by insurers increased by 9 per cent compared to the previous 12 months, to $16 billion.
The net margin of the industry dropped from 5 per cent to 4 per cent.
Mr Gath defended the premium increases, saying they ensured the insurers were able to stay in business and pay claims, and fostered competition.
He said consumers should shop around for better value policies, producing figures showing the cost of a top-level policy differed by as much as $200 a month between some funds.
"Do you think most Australians would be interested in saving $1800 or more every year on a product they are likely to hold for the rest of their lives?" he said.
"Contrary to some misinformed commentary, there is a vibrant market for (private health insurance) products," he said. "I invite all consumers to go out and find it."
To compare private health insurance policies, visit privatehealth.gov.au.