Leading insurer proposes premium deregulation
One of the nation’s major health funds has raised the prospect of the Federal Government deregulating private health insurance premiums.
In what would be a major change to the regulation of the private health insurance market, NIB Chief Executive Mark Fitzgibbon told The Australian Financial Review that the Government could be close to ditching the requirement that premium increases be subject to Health Minister approval.
“I think the planets are aligning for price deregulation with some sort of surveillance role of Government. But I’m not quite sure,” Mr Fitzgibbon said. “I think it’s good politics, because I don’t think Government ever wants to really be associated with inevitable price increases.”
Under current arrangements, each year health insurers submit their proposed premium increases to the Health Minster, who then accepts or rejects them.
Mr Fitzgibbon said that the process was an additional administrative burden on the industry, and was unnecessary because competition between insurers was sufficient to curb the scale of any premium increase.
“I’ve no doubt that in a world where Government doesn’t approve price increases, there would be more competition and better prices for consumers,” he said.
A spokeswoman for Health Minister Peter Dutton did not comment specifically on the deregulation idea, but told the AFR that the Government may consider “short- and long-term options for private health reform”, though adding that any change would not occur without consultation with industry, consumers and other stakeholders.