The NIB Holdings Limited (ASX: NHF) share price is pushing higher on Monday after releasing an update on its premium increases for 2021.
At the time of writing, the private health insurer's shares are up 2.5% to $5.76.
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What did NIB announce?
This morning NIB announced that private health funds across Australia have received approval from the Federal Minister for Health for changes to private health insurance premiums.
According to the release, NIB has received approval from the Minister to increase its insurance cover premiums for NIB health funds by an average of 4.36% across all products. These changes will come into effect on 1 April 2021.
This is a larger than normal increase for NIB. Over the last three years, the company's average premium increase was 3.55%.
However, NIB's Managing Director, Mark Fitzgibbon, believes the larger than average increase is necessary to ensure members can access medical treatment when and where they need it.
Mr Fitzgibbon commented: "Premium changes are never welcomed but the reality is that the cost of medical treatment continues to rise well above inflation and we're increasingly seeing members access healthcare services with health insurance a critical funding tool enabling treatment and care."
"A perfect example is the concerning increase in members accessing member health services. In the 12 months to 30 September 2020 mental health benefits totalled $48.8 million," he added.
Competitive pricing.
The Managing Director believes that NIB's products are still both competitive and affordable, particularly given that this increase comes from a lower premium base compared to the industry average.
He notes that following the 1 April 2021 premium increase, NIB's annual average premium per single equivalent unit will be $2,844. This compares to the industry average of $3,119.
Elsewhere, rival Medibank Private Ltd (ASX: MPL) has delivered its lowest premium increase in two decades this morning.
It revealed that it has received approval to increase Medibank and AHM health insurance premiums by an average of 3.25% from 1 April 2021.
