UPDATE: The number of Australians dropping gold-tier health insurance policies is surging as premium costs skyrocket. New reports from the Australian Medical Association (AMA) reveal that premiums have more than doubled over the past 16 years, outpacing a 20% rise in health inflation. With escalating costs, the AMA warns that many Australians are at risk of exiting the private health system entirely.
Just announced on Friday, the AMA is calling for immediate reforms, including the establishment of an independent regulator to oversee annual premium increases. The association emphasizes that without these changes, the number of Australians with private health insurance could continue to plummet as costs become untenable.
Currently, over 15 million Australians, which is more than half the population, hold private health cover. However, the AMA reports a staggering drop of 360,000 gold-tier policies since the onset of the COVID-19 pandemic in March 2020. These policies, which typically cover essential services like maternity and mental health, now average around $500 per month for families.
AMA President Danielle McMullen stated, “Public hospitals are struggling with a severe log-jam crisis, pushing more patients towards the private sector.” However, she highlighted that “runaway insurance premiums and low-value offerings leave customers facing tough choices about the level of cover they can afford.”
The AMA’s report card shows that between 2008 and 2024, while premiums soared by more than 100%, the Medical Benefits Scheme (MBS) indexation rose by less than 20%. This stark contrast highlights the growing divide between insurance costs and healthcare access.
The federal government is currently contemplating submissions from health insurers for premium increases set to take effect on April 1. Insurers are expected to request above-inflation hikes, further exacerbating the financial strain on Australians. In 2024–25, it was reported that insurers returned only 84.2% of premiums to consumers as benefits, a significant decline from the 88% level seen in 2019.
In a response to the AMA’s claims, Private Healthcare Australia, which represents health funds, disputed the data, asserting that funds are now paying out more for patient care than ever. They reported that benefits for hospital treatments increased by 5.7% to a record $19.4 billion in the past year.
The AMA’s urgent message is clear: if immediate reforms are not implemented, the trend of dropping gold-tier policies will continue, jeopardizing healthcare access for many Australians. With private maternity units already closing, the need for action is more pressing than ever.
As developments unfold, all eyes will be on Health Minister Mark Butler as he weighs these critical submissions from health funds. The implications for millions of Australians are significant, making it imperative for the government to act swiftly in this escalating crisis.
Stay tuned for updates as this situation continues to evolve, impacting the health and financial wellbeing of Australians across the nation.
