WHY DOES HEALTHCARE FEEL SO MUCH MORE EXPENSIVE?
Because it is. The government's approval of an average 5.59 per cent insurance premium hike follows a 39.7 per cent increase between 2010 and 2015.
Average weekly earnings rose 22.39 per cent over the same period, so you probably are paying a lot more relative to your pay packet.
WHY THE BIG RISE?
Insurers say they need to cover the cost of treating a growing, ageing population.
Australians' average life expectancy has risen from about 70 to over 80 in the last half century, which means an extra decade of healthcare per person and a huge increase in treatments for age-related illnesses.
There's also the increasing number of Australians requiring treatment for obesity, diabetes and other lifestyle-related conditions.
IS THAT IT?
People also want better healthcare and that costs money.
Of course, improved care means people are less likely to die of once fatal diseases. Which pushes up life expectancy. Which increases demand. Which increases costs.
"It feeds on itself," ANZ chief economist Shane Oliver said.
HOW MUCH DOES THIS COST INSURERS?
A lot. HCF paid out nine per cent more in benefits in 2014/15 than it did 12 months earlier, which is similar to the increases quoted by other companies.
Medibank Private says the number of hospital admissions per member has risen 20 per cent since 2010.
HOW MUCH WILL THIS LATEST HIKE COST CONSUMERS?
Federal Labor estimates families will have to pay an extra $200 a year.
St George Bank senior economist Janu Chan points out that lower petrol prices are helping soften the blow by putting extra cash in people's pockets, but rises generally mean consumers will have less money to spend elsewhere.
"If people pay the five per cent and their wages are only going up two per cent, there's less money left over for elsewhere in the economy, which has the effect of depressing consumer spending," ANZ's Dr Oliver added.
WHAT CAN CONSUMERS DO?
Not much. You can shop around, but the 5.59 per cent hike is an average. Some insurers are increasing premiums by much more.
The other option is to cut or reduce cover, but that runs the risk of big out-of-pocket expenses down the line and puts extra pressure on public healthcare and its waiting lists.
WHAT HAPPENS NEXT?
Insurers, analysts and economists are agreed: expect more of the same. Outsourcing services such as scan analysis offshore could help cut costs, as could the availability of generic drugs as patents lapse, but that takes time.
"The reality is that healthcare costs will continue to rise at above average rates," Dr Oliver said.
