New analysis from The Australia Institute has found that private health insurers are making a killing but have managed to convince the government to let them make even more.

According to the latest data from the Australian Prudential Regulation Authority (APRA), the biggest of them all, Medibank, recorded a pre-tax profit of $785 million last year, yet has been given permission to increase premiums by 3.99% from next month … above the average increase and above the rate of inflation.

Medibank’s profit represents a 45% return on equity, which means – in one year – it made almost half the overall amount the company’s shareholders have invested in the company.

BUPA made $607 million and is putting premiums up by 5.10%, while NIB made $289 million and will hike premiums by 5.79%.

“While Australians struggle through a cost-of-living crisis, health insurers are raking it in,” said David Richardson, Senior Research Fellow at The Australia Institute.

“They know their customers are struggling. But they obviously care more about profits.

“How much profit is enough? Medibank made three-quarters of a billion dollars yet is still putting premiums up by more than most.

“When they’re making a fortune, there is no justification for increasing premiums above the rate of inflation.

“Do they even live in the real world? This is a dud industry which is milking profit from customers’ pain.”