October 25th 2024.
Private health insurance companies are considering raising their prices in New South Wales (NSW) after the state government passed new laws aiming to hold large corporations accountable for their use of state hospital beds. The legislation, which was approved by parliament last night, allows the government to levy a tax of $3.27 per person per week, which is an increase of $1.50 from the previous rate.
According to the government, this tax hike is necessary because some major insurers, such as HCF, NIB, Bupa, and Medibank, have not been paying their full bills for using public hospital beds. This has resulted in a loss of around $140 million annually for the healthcare system. The issue of private insurers not paying their fair share is not a new one, as similar legislation was passed in 2013 under the leadership of former premier Barry O'Farrell and treasurer Mike Baird. However, a recent breakdown in the agreement between the government and insurers has prompted the current treasurer, Daniel Mookhey, and health minister, Ryan Park, to take action.
Minister Park explained, "All we're asking is that private health insurers pay their fair share for their use of public hospital beds. Every day they don't, it costs the state over $338,000 – that's a significant amount." This issue has become even more pressing as the cost of living crisis in NSW continues to affect millions of people. While some not-for-profit insurers have been paying the full bed rate, the peak body for private insurers has warned that they will have to increase prices in response to the new legislation.
Dr. Rachel David, CEO of Private Healthcare Australia, expressed her concern, saying, "This policy is a blow to the millions of people in NSW who are already struggling with the cost of healthcare. It will make NSW the most expensive state in Australia for health insurance and could result in over 75,000 people dropping their coverage next year." Private Healthcare Australia has estimated that premiums will rise by $78 for individuals and $156 for families next year due to the legislation.
Treasurer Mookhey, however, believes that insurers have no reason to pass on the costs to their customers. He stated, "Premiums did not decrease when the major insurers stopped paying their bills, so they should not be threatening families with an increase now. The solution is simple – the big insurers can resolve this issue by paying their bills." The government is standing firm on their decision, emphasizing that it is necessary for private insurers to contribute their fair share to the healthcare system in NSW.
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