Health Minister Sussan Ley has defended another jump in health insurance premiums, insisting an overhaul of the system is on the way.
Premiums will increase on average by 5.59 per cent from April 1, down from 6.2 per cent last year after the minister stepped in and asked health funds to either lower their premium increases or justify the hikes.
Consumer advocates have slammed the rise, arguing health funds are raking in massive profits while consumers are slugged with higher premiums, not to mention the $6 billion taxpayers contribute every year in subsidies.
The average premium will rise by more than three times the inflation rate, highlighting an urgent need for reform, the Consumers Health Forum said.
"After 16 years of chronic premium increases, it is no longer acceptable for the industry to fall back on the argument that rising health prices are inescapable," the forum's chief executive Leanne Wells said.
Meanwhile, consumer group Choice urged consumers to consider dropping their extras insurance and paying the full cost for things such as dental check-ups, arguing many were paying more in premiums than they receive in benefits.
Wednesday's announcement meant consumers had been slugged with a 48 per cent cumulative increase in premiums since 2009 - two weeks after Medibank announced a 58 per cent jump in net profit.
"While families and people over the age of 55 typically get value out of extras insurance, other consumers are often short-changed," Choice spokesman Tom Godfrey said.
Ms Ley flagged possible changes to extras cover as part of the government's planned private health insurance overhaul.
"I'm not convinced that consumers are getting the best possible deal for their extras cover," she told reporters in Canberra.
She said her intervention this year resulted in 20 health funds resubmitting a lower increase, potentially saving the average family $166, but admitted there was much more work to be done.
Non-listed insurers had more than $5 billion worth of excess capital - funds that could be used to lower premiums, she said.
She conceded the system had been letting down consumers for a long time.
Labor said families would be slugged an extra $200 a year as a result of the April 1 hike.
"That takes the total increase under the Abbott-Turnbull government to around $600 after the coalition approved the two highest increases in a decade in 2014 and 2015," opposition health spokeswoman Catherine King said.
Major health funds argue that the fee increases are needed to help them cope with the rising costs of healthcare, combined with Australia's ageing population.
Premium increases by the major funds in 2016
Medibank - 5.64pct (compared with 6.59pct in 2015)
Bupa - 5.69pct (6.50pct)
HCF - 5.42pct (6.50pct)
NIB - 5.55pct (6.55pct)
HBF - 4.94pct (5.96pct)
Industry average - 5.59pct (6.18pct)
