There is no good news for private health insurers in the quarterly health Insurance statistics released today.

The headline number – the proportion of the population insured – continues to decline and most of the other indicators are gloomy too. The youth exodus hasn’t been stopped – there were almost 3,500 fewer 25-29 year olds insured at the end of September compared to three months ago. Costs are up faster than inflation (so premiums will probably again rise faster than inflation next year). The much-touted prostheses savings – which have been factored into the current premiums – have not materialised, prostheses costs went up 0.08% in real terms in the last three months. Medical out-of-pockets continue to go up too.

Table: Hope and reality in hospital insurance, September quarter, 2019

Hope September 2019 outcome Indicator September quarter 2019 compared to September quarter 2018 September quarter 2019 compared to June quarter 2019 Overall decline arrested Per cent population insured Down 0.7% Down 0.1% Youth exodus stopped Total insured population aged 25-34 Down 24,189 Down 3,496 Cost growth arrested Change in total benefit payments (adjusted for inflation) Up 3.98% Up 2.35% Prostheses savings realised Change in total prostheses benefits paid (adjusted for inflation) Up 6.44% Up 0.08% In-hospital medical gaps reduced Change in total medical gaps paid by patients (adjusted for inflation) Up 0.82% Up 2.14%

Note: all statistics at https://www.apra.gov.au/quarterly-private-health-insurance-statistics

There are only three possible strategies for private hospital insurance:

The Ostrich approach: put your head in the sand and hope something will happen

The Santa Claus approach: there is no problem a big increase in government subsidies (direct or indirect) cannot fix

The industry reform approach.

Grattan Institute supports the third approach. Come to our presentation at the National Library on 25 November to hear more.