Consumers will be slugged with an average 4 per cent rise in private health insurance premiums this year despite major Turnbull government reforms designed to rein in costs.
While the numbers are yet to be finalised, Health Minister Greg Hunt has revealed there is likely to be an average 3.9 per cent rise for policyholders on April 1 this year.
A 3.9 per cent increase would represent the lowest premium increase since 2001 - but would still be nearly twice the rate of general inflation. It would add close to $200 dollars to the average policy a year, and is likely to force more families to drop their cover.
It also means that the government's sweeping changes and cuts to the medical devices sector - announced in October - have so far only delivered a one per cent reduction in premium price rises compared to 2017, which saw an average 4.84 per cent rise.
In an interview with Fairfax Media last year, Mr Hunt said the government wanted this year's rise to be "as close as possible" to the inflation rate of 2 per cent.
Mr Hunt sought on Wednesday to put a positive spin on the numbers.
"We're delivering the lowest change in 17 years," he said. "There is more to be done. There is always more work, which is why we will continue to work with the private health insurers on additional steps, and with other sectors of the medical profession."
The rise is lower this year than in any year under Labor, whose policies Mr Hunt claimed would result in a 16 per cent increase.
But Labor's Catherine King said the price rise was more disappointing news for Australians already struggling with cost of living pressures and stagnant wages.
"Double the rate of inflation is simply not good enough," she said. "The government has been in bed with the private health insurers trying to negotiate this, rather than actually standing up to private health insurers to say this product is now becoming unaffordable for many Australians.
"The Turnbull government now will have presided over a 25 per cent increase in private health insurance premiums and for average families that is $1000."
Tony Bartone from the Australian Medical Association said private health insurance was simply not offering good value.
"We need sustainable private health insurance, and if consumers are making decisions to opt out based on further increases on a product that they see of little or no value, well, that's only bad for the health industry as a whole," Dr Bartone said.
The government's reform package cut more than a billion dollars from the medical devices sector and scrapped coverage for natural therapies such as yoga. It will allow insurers to charge higher excesses and offer discounts to under-30s.
It also includes a new simplified four-tier premium system - gold, silver, bronze and basic - to make it easier for consumers to select and understand their cover, and seeks to eliminate waiting periods for some mental health services in order to attract more young people.
The reforms were designed to prevent an exodus of customers that could threaten the industry with collapse - although many of the changes do not take effect until later this year, or next year.
Mr Hunt has described private health insurance as "an article of faith" for the Coalition, despite widespread public anger over relentless price rises and diminishing cover.
The final numbers will be announced next month and the price rises will come into effect in April.
