The private healthcare sector in Australia is on the brink of disaster as only three private health insurers will be left standing by 2022, according to APRA.
Australian Prudential Regulation Authority (APRA) member Geoff Summerhayes predicted that due to the ill state of the private healthcare sector in the country, there will only be three major healthcare firms left standing in two years time.
Due to the soaring rates of chronic diseases and an ageing population, it has forced firms to increase their premiums to cover the cost.
Also, more younger customers have turned away from private health insurance due to the increase of premiums.
In a speech to a meeting in Sydney, Summerhayes called for a government inquiry into the private health insurance system as he said the industry has fallen into a “death spiral”.
He told the Members Health event that profit margins were eroding because claims were rising faster than premiums.
Hospital coverage throughout the country has fallen to 44% which is its lowest level since June 2007. This is due to around 127,000 policyholders aged between 20-34 leaving their private health insurance over the past two years.
The younger customers have been replaced by older policyholders and they are more likely to make expansive claims.
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