Push to raise age of lifetime health cover penalty to 35

Catholic Health Australia, which represents a large number of private hospitals, is pushing for the age of the penalty to be raised to make health insurance more appealing to Australians aged in their mid-30s, when many are prompted to think about private cover while planning to start a family.


CHA health policy director James Kemp said thousands of first-time mothers were opting to give birth in the public system after “realising they can’t afford private health insurance because they’ve racked up years of lifetime health cover penalties.”

“Young people are living at home longer, getting married later, and starting families well into their 30s,” Mr Kemp said.

“We should be encouraging them to take out insurance, not punishing them for not doing so.”

Private Healthcare Australia chief executive Rachel David said the federal government must ensure that any such change did not disadvantage the 863,625 people already paying the penalty, as insurers were not in a position to fund any rebate or adjustment.

“I think it’s a reasonable suggestion to look at that lever again,” Dr David said. “It was 1998 that the loading was introduced, we’re now over 20 years down the track and people’s lifestyles have changed.”

The APRA data also shows COVID-19 wiped $645 million – 42 per cent – from insurers’ profits for the 2019-20 financial year, after accounting for $1.4 billion put aside for surgeries postponed due to restrictions that were yet to be caught up on in June.

Mr Roff said affordability reform must be considered “as a matter of urgency”, as thousands of delayed elective surgeries began to hit public hospitals, whose waiting lists had blown out during the six-week elective surgery ban in March and April.

“Today’s data shows there were more than 230,000 private patient episodes put on hold due to the pandemic, on top of deferred public patient care – an indication of how much the health sector will have to make up in the near future,” he said.

“There are estimates the backlog in elective surgery resulting from COVID-19 surgical restrictions could take years to clear, even with the full capacity of the public and private systems.”

A spokesman for federal health minister Greg Hunt said the government had already delivered “the most significant reforms to private health insurance in over a decade” and delivered a lower premium increase for 2020 of 2.92 per cent, which insurers have delayed until October 1.

The next phase of reforms would focus on making health insurance more affordable “especially for young people”, the spokesman said.

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