Analysis: Average wage increases vs health insurance premium hikes
Average wage increases can't keep pace with rising health insurance costs.
With the annual health insurance rate hike only a day away, consumers are scrambling to switch health funds and lock in a lower rate. This is a task that may be more important than ever.
Each quarter the Australian Bureau of Statistics (ABS) releases its seasonally adjusted Wage Price Index (WPI). The December 2015 quarter ended on a low-note, with growth at a paltry 0.5%.
The 2015 calendar year culminated with year-on-year growth at a mere 2.2%, a record low since the series was first published in 1998. Wage growth has been on a continued downward trajectory since 2012.
Why is this relevant?
As wage growth has declined, health insurance premiums have continued to rise. The Australian Government Department of Health has been tracking the rises in health insurance premiums since 2010. In that time, the average wage has only increased by 3% per year. In the same time span health insurance premiums have increased on 5.73% per year.
The most recent industry weighted premium increase of 5.59% is over two-and-a-half times that of 2.2% wage growth.