Grattan: Private health insurance plunging into ‘death spiral’

For years I have argued that Australia’s private health insurance industry is facing a ‘death spiral’. Every year, young and healthy people (the so-called “invincibles”) leave system, leaving a larger proportion of unhealthier, older, expensive users.

If this process is allowed to continue, then it will inevitably force premium up further, leading to a further exodus of the invicibles, and so on.

Australia’s private health insurance sector can only remain solvent if enough young and healthy people agree to sign-up, since they are the ones who are likely to pay more into the system than they take out.