New fee Aussies are going to hate
A private health insurance price hike, expected to affect most of Australia's 13.75 million policy holders, will kick in on April 1 and for many, it will be the second increase in just six months.
In December 2020 the Federal Minister Health, Greg Hunt, announced health insurance premiums would rise by an average of 2.74 per cent.
It's estimated this price hike will cost the average family $127 a year and the average individual $59.
Although this is the smallest increase in 20 years, it follows a 2.92 per cent rise that hit in October last year (delayed from April due to COVID) and a 3.25 per cent hike in 2019.
Although the 2019 price hike triggered Aussies to quit their private health insurance in droves, after the 2020 rise, more than 100,000 new policies for private hospital cover were taken out, potentially triggered by concerns over public waiting times for elective surgery continuing to blow out due to the COVID-19 backlog.
WHAT YOU CAN DO
According to Laura Crowden, spokeswoman for comparison website iSelect, anyone struggling with the cost of private health cover should consider switching providers rather than cancelling it altogether.
"Saving money doesn't have to mean compromising your level of cover, with many customers able to ease the budget strain by switching to a similar level of cover with a different fund for a cheaper price," she said.
"Your health fund should notify you of exactly how much your policy will increase from April 1 and this should be your prompt to shop around to see how your current policy stacks up."
It's estimated that only 1 in 5 Australians switch health funds each year but there are consumer protections in place to make it easier.
WHY ARE PREMIUMS GOING UP?
According to the Australian Ombudsman's website, the price of private health insurance increases in line with the rising cost of health care, including medical equipment, staff wages and increasingly complex surgeries.
The Federal Government's health insurance rebate scheme offers some help with premiums if you earn less than $140,000, which you can claim as part of your tax return or as a discount off your premiums. The amount you receive will depend on your age, income and number of dependants.
THE PRICE INCREASES ANNOUNCED SO FAR
Some health insurance providers have already announced how much their premiums will increase by come April 1, including:
- HCF: an average increase of 2.95%
- Bupa: an average increase of 3.21%
- Medibank: an average increase of 3.25%
- Peoplecare: an average increase of 3.9%
- NIB: an average increase of 4.36%
HOW TO BEAT THE PRIVATE HEALTH INSURANCE PRICE INCREASE
1. Pay your annual premium in full before April 1
If you pay your annual premium before the increase kicks in, the whole amount you pay will be subject to your current rate, which means you can avoid a price rise for another 12 months.
2. Shop around for a cheaper policy
Use an online comparison site to get quotes for different policies in the same category and with similar extras to see if you can save.
The announced 2.74 per cent price increase is an average, which means that funds may opt to go lower or higher than that. For example, some of the smaller funds have announced their premiums will be increasing by a negligible amount with St Lukes rising by 0.5 per cent, Health.com.au 0.83 per cent and HBF 0.94 per cent.
And don't forget, you can take any served waiting periods from an equivalent or lower level of hospital cover with you and might also be able to take advantage of a special offer for switching providers.
3. Haggle with your provider
Contact your current private health provider and ask them for a better deal. Aside from having special discounts and offers available you might not be aware of, they can also review your premium and remove anything you don't need to bring the cost down.
4. Check if you're eligible for a corporate discount
Legislation allows your employer, Super fund or mutual bank to offer you up to 12 per cent discount on private health insurance policies.
Originally published as New fee Aussies are going to hate