Benefits paid by private health insurers topped $21 billion over the 12 months to the end of September 2019 while the sector's profitability declined.
Quarterly statistics released by the Australian Prudential Regulation Authority confirmed private health insurers increased benefit outlays over the past year by 3.65 per cent while premium revenue rose 2.62 per cent.
The sector's net margin fell from 5.18 per cent to 4.16 per cent. Its net profit after tax decreased to $1.24 billion for the year ended September 2019 from $1.41 billion for the year ended 30 September 2018.
The number of Australians covered by private hospital insurance fell by 0.1 percentage points in the September quarter - to 44.1 per cent - but the number of insured people rose 15,157 to 11,242,726.
Family policies increased by 1,362 and single policies by 4,339 during the quarter. The largest decrease in coverage during the quarter was 4,485 for people aged between 30 and 34.
During the September quarter, insurers paid $4.052 billion in hospital treatment benefits, an increase of 2.9 per cent compared to the June quarter.
Hospital treatment benefits were comprised of $2.870 billion in hospital services such as accommodation and nursing, $634 million for medical services and $548 million for prostheses.
Average hospital benefits per person increased from $1,349 for the year ending September 2018 to $1,393 for the year ending September 2019.
Insurers paid $1.297 billion in general treatment (ancillary) benefits during the September quarter. This was a decrease of 0.3 per cent compared to the June 2019 quarter. The major categories of benefits were $193 million in optical, $110 million in physiotherapy and $74 million and chiropractic.
Total benefits paid for prostheses increased by 0.6 per cent in the September quarter 2019 compared to the June quarter 2019. The prosthetic group for which the greatest amount of benefits were paid was cardiac, comprising 17.4 per cent of all prosthetic benefits and totalling $95 million.
The average out-of-pocket (gap) payment for a hospital episode was $304 in the September 2019 quarter. This included out-of-pocket payments for medical services, in addition to any excess or co-payment amounts relating to hospital accommodation.
The out-of-pocket payments for hospital episodes increased by 0.6 per cent compared to the same quarter for the previous year.