The cost-of-living pain for Australians is about to get worse, with private health insurance premiums rising on Wednesday — many of them well above the 4.41 per cent increase approved by the government.
With fuel prices climbing and household budgets stretched, families are being forced to make tough decisions as more health costs are shifted onto patients least able to absorb them.
The AMA warns that without meaningful reform, Australians will continue to pay the price for a private health system weighed down by outdated policy settings, inconsistent rebates, and a public hospital network under significant strain.
AMA President Dr Danielle McMullen will today address health leaders at the AFR Health Summit, urging the sector to work together on practical reforms that improve affordability for patients and support long‑term sustainability.
“We have seen what happens when the system is not in balance,” Dr McMullen said.
“Our public hospitals are already overwhelmed, and governments cannot keep up with demand for public specialist appointments and essential surgery, forcing more Australians to rely on the private system for timely care.
“Patients are being squeezed from every direction, and the system simply isn’t keeping up. We need to stop patching around the edges and start addressing the structural issues that are driving up costs and limiting access.”
To support a national conversation on reform, the AMA is releasing The gaps that create gaps — a new online resource outlining the policy failures and structural inconsistencies that drive up out‑of‑pocket costs.
“It’s clear that just blaming providers — whether insurers, doctors or hospitals — doesn’t bring costs down or ensure sustainability,” Dr McMullen said. “But there are straightforward policy changes that could make a real difference.”
The AMA has identified several immediate reform opportunities for government, including:
- increasing the known‑gap limit, which has been frozen at $500 and never indexed
- fixing the ‘no‑gap’ cliff, which leaves patients exposed to sudden out‑of‑pocket costs
- reducing confusing and inconsistent rebates across the market
- establishing a Private Health System Authority to drive long‑term reform and transparency.
Broader opportunities include expanding hospital‑in‑the‑home, revising product tiers, and reviewing private health financial incentives — recommendations outlined in the AMA’s Prescription for Private Health.
Dr McMullen said the government must also address the widening gap created by the long Medicare freeze and use the new National Health Reform Agreement to tackle excessive public hospital outpatient wait times.
“Without action, Medicare becomes a promise unfulfilled,” Dr McMullen said.
The gaps that create gaps resource, alongside the AMA’s Informed Financial Consent guide, helps patients navigate the system and shows how targeted reform can improve affordability and access.
“If we want change, if we want improvement, then we need real policy reform,” Dr McMullen said.
“In this economy, it is clear health costs are not going down. Sustainability for providers and access for patients are both at risk unless government acts.”
