The NIB Holdings Limited (ASX: NHF) share price is pushing higher on Thursday morning.
In early trade, the private health insurer's shares are up over 1% to $7.02.
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Why is the NIB share price pushing higher?
The catalyst for the rise in the NIB share price this morning has been the release of an update on its premium increases for next year.
According to the release, the company has received approval from the Federal Minister for Health to increase health insurance premiums by an average of 2.66%. This is the company's lowest premium change in two decades.
However, just because the premium increase has been approved, doesn't necessarily mean the company will actually increase them immediately on 1 April.
NIB's Managing Director, Mark Fitzgibbon, revealed that the company is considering deferring premium increases in recognition of the ongoing impact of COVID-19 on its members.
He said: "It's possible the increase could be deferred for likely three months depending upon developments, especially in relation to our claims experience and risk equalisation commitment. We'll provide details on what this looks like for our members in the new year."
Nobody likes premium increases but…
And while Mr Fitzgibbon acknowledged that consumers never welcome premium increases, he stressed that they are necessary to keep pace with the rising cost of healthcare treatment.
Mr Fitzgibbon commented: "We've worked hard to keep our price changes to a record low while still allowing us to fund medical treatment for our members when and where they need it. We're also investing more in our members' future health by leveraging data science and technology to deliver more personalised healthcare through unique products, digital health services and health management programs."
The Managing Director also highlighted that the company's average premiums are still lower than average. Following the 2022 premium increase, NIB's annual average premium per single equivalent unit is estimated to be $2,484. This compares to the industry average of $2,657.
Incidentally, this morning Medibank Private Ltd (ASX: MPL) one-upped NIB by announcing that it will defer its premium increases for five months from 1 April. After which, its premiums will increase by an average of 3.1%, which is its lowest increase in 21 years.
