By Andrew Brown in Canberra

Australia’s peak medical body wants independent oversight of price hikes to private health insurance premiums, following a more than three per cent spike.

The federal government has approved an average industry premium rise of 3.03 per cent from April, the largest increase in five years after jumps of 2.9 per cent in 2023 and 2.7 per cent in both 2022 and 2021.

Australian Medical Association president Professor Steve Robson said more oversight was needed to make the system fairer.

“We need an independent body that has the capacity, objectivity and expertise to ensure the system is fair for patients and balances everyone’s interests,” he said.

“We have seen people signing up in droves to insurers and at the same time we’ve seen management expenses increasing. We want to see a mandatory minimum payout with 90 per cent of every premium dollar going back to the patient.”

Premiums for NIB customers will go up by 4.1 per cent, while BUPA will have a rise of 3.61 per cent, 3.95 per cent for HBF, while Medibank Private will pass on a 3.31 per cent increase.

Health Minister Mark Butler said the approved 3.03 per cent increase was below the annual rise in wages, which was 4.2 per cent in 2023.

“I wasn’t prepared to just tick and flick the claims of health insurers, as the opposition asked me to do,” he said.

“I asked insurers to go back and sharpen their pencils and put forward a more reasonable offer for the 15 million Australians with private health insurance.”

Mr Butler said the government had given $7.3 billion to policyholders through its private health insurance rebate.

It’s estimated more than $23.5 billion in health and medical benefits were paid out by private insurers in the past year.

“Private health insurers must ensure their members are getting value for money,” Mr Butler said.

“When costs rise, Australians want to know that higher premiums are contributing to system-wide improvements like higher wages for nurses and other health workers and ensuring affordable services are available.”

Opposition health spokeswoman Anne Ruston accused the government of timing the announcement of the premium rise to be after the by-election in the Victorian seat of Dunkley.

“(The prime minister) blatantly delayed this announcement, with no apology to the more than 14 million Australians who need to prepare for this additional cost,” she said.

“We also know the increase announced today is only based on the average industry price, so some consumers will be paying substantially more with less time to budget or shop around.”