Rising medical insurance payouts vs premiums is unsustainable

The health insurance industry is warning the growth in the rate of its claim costs compared to premiums is unsustainable.

Publishing the industry’s quarterly statistics today, the Health Funds Association identified rising health costs as its key challenge.

Executive director Roger Styles said claim costs had grown at double the rate of premiums during the past two years, which was not sustainable.

Premium income for the year to the end of September of $859 million, was up 5 percent or $41m on a year earlier. Claims paid were up 9.9 percent or $67m to $743m.

The two main reasons behind recent cost pressures were that more people were claiming on their health insurance, and the average value of each claim was rising, Mr Styles said.

In the past year additional services became available, such as private radiotherapy in Auckland, which was not previously an option for people with health insurance.

Cost-shifting was continuing from the public sector, with a rise in the number of claims for surgery knocked back by ACC, he said.

Also from this month, ACC would require co-payments from patients for physiotherapy, which would have an impact on insurers who covered top-ups for ACC in their policies.

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