The cost of private health insurance for Australian families will increase by as much as $200 after the federal government approved plans by funds to increase premiums by nearly 5 per cent from April.
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Health Minister Greg Hunt signed off on an average premium rise of 4.84 per cent, seeing the top tier of family hospital cover increase to about $4500 annually and singles cover to increase by about $100 to $1250.
Mr Hunt said the 13 million Australians with private health insurance would have seen higher premium increases if not for pricing changes on some procedures including hip and knee replacements and some prostheses.
Despite price rises at three times the rate of inflation, the federal government said the hike is the lowest in a decade.
The average weekly rise will come to about $2 for a single person and $4 for families.
Prime Minister Malcolm Turnbull acknowledged higher costs would hit Australian families hard, and said individuals should form their own judgments about the benefits of private cover.
"My counsel would be that people should stay in private health insurance but obviously people have got to make their own decisions," he told radio 3AW.
"At a time when household budgets are tight every additional cost hurts, there's no question about that.
"The health insurers claim... that it's because of the increasing cost of health services. It has been running at a higher rate than inflation... labour costs and also the increased cost of health technology."
Industry watchers had been tipping a 5 per cent hike in 2017, coming on top of cumulative increases of 28 per cent since 2012.
It comes as executive pay packets at the biggest private health insurers have soared. Medibank Private annual reports show the total pay of former chief executive George Savvides climbed from $1.4 million in 2014 to $2.4 million in 2016.
NIB chief executive Mark Fitzgibbon's total pay packet increased by 95 per cent between in the same period to $1.76 million.
Market leader BUPA does not disclose Australian chief executive Richard Bowden's pay, while HCF only discloses a total of about $7 million for senior eight executives.
In 2016, the average price rose by 5.59 per cent, compared with a long-term average of 6.1 per cent a year.
Opposition health spokeswoman Catherine King said the latest premium hike would hit families hard.
"Australians are paying more than ever for their private health insurance but they are getting less and less, and the Liberals have done absolutely nothing to help families with the costs of health," Ms King said.
"This $200 increase comes on top of some of the highest premium increases on record, spiralling complaints against private health insurers and Australians increasingly discovering they are simply not covered for basic inclusions in their policies.
She said last financial year the Private Health Insurance Ombudsman received more than 4400 complaints, a 30 per cent increase.
"The new Health Minister is joking if he thinks this is good news – he can't seriously expect a pat on the back for a 23 per cent increase to private health insurance premiums."
A BUPA spokesman said factors contributing to price increases included an ageing population, medical technology advancements, rising consumer expectations and a decrease in the private health insurance rebate.
