5.3 million Australians to pay more for health cover: Is it time to switch?
Three major health funds – Bupa, HCF and nib – are upping their premiums on 1 November.
2022 has been a weird year for private health insurance price rises.
Well, the last few years have been weird for a lot of reasons. But this year was especially weird for health insurance.
In "normal" years, Aussie health funds bump up prices on 1 April.
This year, most of the big funds delayed those price rises by 6 months or more.
They justified this as a way to "give back" to members after the COVID-19 pandemic, when health funds made record profits.
Mostly those profits were off the back of delays to elective surgery.
So, what's happening on 1 November?
Major health funds Bupa, HCF and nib are upping their premiums on 1 November.
Time for some quick maths.
The Australian Prudential Regulation Authority's (APRA) June statistics shows 11,678,283 Australians are covered by private health insurance.
Bupa has a 24.8% market share, HCF has 11.9% while nib holds 9.3% of the pie, according to the Commonwealth Ombudsman.
The combined market share of these 3 funds is 46%.
Overall, this means 5.37 million members will see their premiums rise on 1 November, which is next Tuesday.
These numbers would be far greater if not for Medibank and ahm delaying increases following a major cyber attack.
What can I do if my premiums are going up?
So what's a person to do with this newfound health insurance insight?
The best thing you can do is to work out a way to pay a lower rate for your health insurance for as long as possible.
If you're a member of Bupa, HCF or nib, you've got 2 options to save.
Switch providers
Switch providersIt's really not that difficult. Just compare your health insurance options then sign up for a new policy online. Your new provider will manage the switch. Just be sure the new policy suits your needs.
One snag with switching is that many funds have already increased their prices this year.
Let's dig a bit deeper into the detail of one fund that is yet to do so.
This year, HCF hospital cover premiums will go up 2.72%.
That's almost bang on the 2022 average premium hike of 2.7%.
Considering HCF is raising premiums by only a little more than the average hike, sticking with HCF might still be the best option for you.
Prepay your premiums at today's rate
Prepay your premiums at today's rateHCF is flexible here, letting you pay for up to 18 months of cover at once. Bupa and nib offer yearly payment options.
That means you'll not pay the higher price until after that period. However, keep an eye on HCF's prepayment deadlines, which are fast approaching.
The issue with door number 2 is that, in the current interest rate environment, many savings accounts are offering over 4% on your money.
That's a better deal than the 2.72% you'd be saving by paying your HCF premiums upfront.
In fact, it beats Bupa (3.18%) and nib (2.66%) too.
Remember as well that premiums may go up again next April. They might go up by quite a lot, thanks to the crazy high inflation rates we've experienced through 2022.
You might be better off waiting until March 2023 to go live on prepaying your premiums.
Check out our top health insurance picks to beat the 1 November premium rises.
