According to data from the Australian Prudential Regulation Authority (APRA), Medibank, the country's largest insurer, recorded a pre-tax profit of $785 million in 2024. This figure represents a 45% return on equity, indicating that the company made nearly half the overall amount its shareholders have invested in just one year. Despite these substantial profits, Medibank has announced premium increases exceeding the industry average.
Other major insurers are following a similar pattern. BUPA reported profits of $607 million in 2024 and is implementing a premium increase of 5.10%. NIB, with profits of $289 million, plans to raise premiums by 5.79%. These increases come at a time when many Australians are facing financial pressures, leading to accusations that insurers are prioritizing profits over the well-being of their members.
David Richardson, a senior research fellow at The Australia Institute, expressed concern over this trend, stating, "While Australians struggle through a cost-of-living crisis, health insurers are raking it in. How much profit is enough? Medibank made three-quarters of a billion dollars yet is still putting premiums up by more than most. They know their customers are struggling. But they obviously care more about profits."
In response, Private Healthcare Australia CEO Dr. Rachel David defended the premium increases, citing the need to keep up with inflation and rising healthcare costs. She emphasized that the agreed-upon increase of 3.73% is as low as health funds can go without seriously squeezing private hospitals and other providers.
For health care professionals, these developments are particularly pertinent. Rising premiums can impact both personal insurance costs and the financial dynamics of the healthcare institutions they work within. It's essential for professionals to stay informed about these industry trends, advocate for fair practices, and consider the implications for their own financial planning and patient care.
In conclusion, the juxtaposition of substantial insurer profits and rising premiums has ignited a debate about the balance between profitability and affordability in the private health insurance sector. Health care professionals should remain vigilant, engaging in discussions and actions that promote transparency and fairness within the industry.
