Australia’s $7.3 trillion medical insurance business may be on the brink of collapse
Health Minister Sussan Ley has announced a $7 billion increase to Australia’s medical insurance industry, after the country’s top insurer, Australia’s Aetna, warned that it was losing business due to a lack of supply.
The Government will announce an additional $2 billion to boost the number of people insured through Aetnan Healthcare, which operates in more than 300 hospitals.
The Government has also committed to making sure there is sufficient supply of the health insurance product by the end of the decade.
But the health minister’s announcement comes after Aetan Healthcare warned that its annual net profit was falling as the number and complexity of patients grew.
Aetanan chief executive officer Mike Brown said the company’s net profit had fallen by more than half in the past 12 months, partly due to the number that had to be paid for, and the cost of covering the uninsured.
“Our net profit is a function of how many patients we cover,” Mr Brown said.
“In other words, the more patients we’ve covered, the better the performance of our business.
In March, Aetann Healthcare posted its first loss in more 30 years. “
This has created a mismatch between the number we cover and the amount of money we’re making from the business.”
In March, Aetann Healthcare posted its first loss in more 30 years.
It has also been hit by the introduction of a new system that has forced insurers to seek more reimbursement from the Government, which will require them to pay premiums in addition to their costs.
In an interview with ABC Radio’s Q&A program on Monday, Mr Brown also said that the Government was considering creating a new “high-risk” group of people that would pay higher premiums and a higher deductible for Aetans’ insurance product.
As well as cutting the number, the Government also wants to make sure that the price of the product stays within the $2-3 billion range.
Mr Brown said that a large number of Aetanes customers were also being charged higher premiums to cover the cost for their health care, which had also led to a decrease in Aetane customers.
He said the Government would continue to work with Aetanyas insurers to ensure that they were paying their premiums.
Health Minister Susan Ley says the Government is considering raising the Medicare rebate and possibly creating a high-risk group of Aets to cover their costs, but she says there are limits on how much they can increase premiums for, ABC Radio Melbourne’s Stephanie Williams reports.
“We need to make a decision about whether or not we will increase Medicare rebates for high-cost patients or not,” Ms Ley said.
She said she believed the Government had to make the right decision about how to respond to the growing demand for their products.
Aetan Health is the third-largest provider of health insurance in Australia, with a $2.4 billion market share.
This year, Aets net profit fell by 22 per cent to $3.8 billion, despite Aetain’s growing business.
In February, Aethena’s net loss fell by 28 per cent, while Aetana’s loss fell 21 per cent.
There are also concerns about the viability of Aes business.
Earlier this year, Australia saw an 18 per cent fall in the number who signed up to its health insurance policy.