Healthcare funds increase approved

THE average family will pay almost $200 more each year for private health insurance, after Health Minister Tanya Plibersek approved an average premium increase of 5.6 per cent.

The latest rise, which will take effect from April, will add about $88 to the annual premium for the average single person, provided they qualify for the 30 per cent private health insurance rebate.

Ms Plibersek played down the rise, saying the increase for the average family amounted to ''about the cost of a coffee'' a week, and said it followed a 9.3 per cent increase in average payments by insurers.

''So they are contributing a lot more back to members than they have in previous years,'' Ms Plibersek said.

The average rise is slightly above last year's rise of 5.06 per cent, and close to the 2011 rise of 5.56 per cent. Individual fund increases varied from 3.2 per cent to 6.8 per cent. Among the major funds, premiums will rise by an average of 6.5 per cent at NIB, 6.2 per cent at Medibank Private, 5.8 per cent at Bupa, 5.7 per cent at HCF and 3.8 per cent at HBF.

Private Healthcare Australia chief executive Michael Armitage said the premium increase was necessary to ensure funds remained viable.

''However, there is no doubt that the introduction of government policies which are negative to the private health insurance industry will always cause prices to be higher than they would otherwise need to be,'' he said.

A report by the Private Health Insurance Administration Council, tabled in Parliament on Friday, showed the industry collectively recorded a profit after tax last financial year of $1.03 billion, $134 million less than in 2010-11. Its profit margin in 2011-12 was 7.6 per cent, down from 9.4 per cent in 2010-11. Ms Plibersek encouraged consumers to shop around for the best deal.

Coalition health spokesman Peter Dutton blamed the premium increase on Labor's cuts to private health insurance subsidies.

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