More members means more payouts for health funds

The recent boost in profits as a result of increased membership for private health insurance companies is expected to fizzle according to the Australian Health Insurance Association. It is argued that the number of benefit payouts will jump and resources will be drained over the next year. AHIA figures predict that member claims will total $100 million by June 2001. AHIA chief executive, Mr Russell Schneider, said that an increase in claims over the next 12 months is expected to reduce the current profitability of private funds substantially, though this would not cause serious financial problems.

‘New health cover brings warning of higher costs', the Australian Financial Review, 19/10/00, p 3.