Robotic surgery now closer to home in WA’s Mid West
April 30, 2026
Catholic Health Australia is calling on the Albanese Government to use next week’s Budget to legislate a minimum 90 per cent benefit-payout ratio for private health insurers, warning that voluntary action has comprehensively failed and patients are paying the price.
The latest data shows just 85.6 cents of every premium dollar is now reaching patient care, down from 91.9 cents before the pandemic.
Had the payout ratio been held at its pre-pandemic 90 per cent, an additional $3.4 billion would have flowed to patient care over the past three years. Instead, that $3.4 billion has been retained by insurers, who posted $2.7 billion in pre-tax profits in FY25 alone.
In the last six years, around 90 private hospital services have closed including maternity wards, surgical units and mental health facilities that communities depended on.
CHA Director of Health Policy Dr Katharine Bassett said the case for legislation was now overwhelming.
“Patients are paying more than ever for private health insurance and getting less back. We are seeing a transfer of wealth from sick Australians to insurer balance sheets,” Dr Bassett said.
“The Health Minister gave insurers a year to fix this voluntarily and they have fallen well short. The payout ratio still sits at 85.6 per cent, and the Government’s own projections only have it crawling to 87 per cent by April 2026.
“Every cent insurers keep is a cent that doesn’t reach a nurse, a surgeon or a hospital bed. Meanwhile, insurer profits have hit record highs, management costs have ballooned, and the hospitals that care for patients are going backwards. The latest data shows that the private hospital sector as a whole is operating at a $34 million loss. That is totally unacceptable.”
Dr Bassett said the policy was modest, achievable, and in patients’ interests.
“A 90 per cent ratio is what Australians were already getting before COVID. It would put $1.2 billion back into patient care every year, and increase the value proposition of private health insurance, which is critical for taking the pressure off our public hospitals.”
CHA said the framework could be designed with sensible thresholds so that smaller and restricted insurers can continue to serve their members sustainably.
CHA is also calling for a Mandatory Code of Conduct, backed by ACCC oversight and independent arbitration, to stop insurers clawing back losses through aggressive contracting.
“Without a Code, insurers will simply squeeze hospitals harder and patients will be the ones who lose access to care. The 90 per cent ratio and the Code go hand in hand,” Dr Bassett said.
“Delivering care with a mission focus means Catholic not-for-profit hospitals care for people living on the margins of society, in low socio-economic communities and with the most complex needs. They are the hospitals being pushed to the brink first. If they shut down, public waiting lists will blow out.
“This is a national health system issue. The Government has the evidence, the policy and the public on its side. What’s needed now is the legislation.”
