Why a hike in health fund fees?

If more than a million Australians will opt out of private health funds, due to changes to Medicare, why are the funds saying their fees will rise? If there’s a million less people in the funds, surely there will be a proportionate decrease in the number of claims? I can see no logical justification for this move.

Other material at http://www.prlab.com.au

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1 Comment

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One response to “Why a hike in health fund fees?

  1. Its all about spreading risk. the people who voluntarily take up private health insurance are the elderly or people with pre-existing conditions, who are more likely to make a claim and cost the insurance company more money than they take in. The people who will leave private insurance are most likely to be young and healthy and put in more money than they take out through claims, with these people leaving the system the other people will have to pay more to cover their way.

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