Private health insurance premiums are declining, with current rates sitting below the average rate of 3.95%.

Medibank has announced its private health insurance increase will sit at 3.88%, its lowest spike in 17 years.

But what does this mean for the ordinary Australian?

Ian McAuley, Research Fellow at the Centre for Policy Development, tells Chris Smith the news isn’t as good as it seems.

“Wages are hardly increasing. For a lot of people, it means if they’re going to keep their private health insurance they will be up for the full amount.

“They’re not getting a compensating wage or income increase.”

Mr McAuley says forcing Australians to get private health insurance isn’t necessarily desirable.

“The government will do far better to try to find a way to fund private hospitals without having to rely on private insurance.”

Click PLAY below for the full interview