Do you have health insurance? Because it’s about to get more expensive

Posted: 4 March 2020 11:13 am
News

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Prices are going up on 1 April - but there are still ways you could save.

On 1 April, Australia's health insurers are set to bump up their prices once again - this time, by an industry average of 2.93%. That might not seem like a lot but, according to health minister Greg Hunt, it could set families back an average of $103 a year.

So why is it happening? Well, putting it simply, health insurers aren't making enough money. Right now, there's an imbalance in the type of people who have health insurance - too many sick or old people, and not enough healthy youngsters.

It means insurance companies are paying out lots of expensive claims, but aren't earning enough premiums to comfortably cover the cost. So prices have to go up.

However, for those of you thinking about ditching your health insurance in response to the price hike, there are a couple of silver linings. The price increase is actually the lowest Australia has seen in 19 years and - most importantly - there may be ways you can avoid it.

If you're interested in keeping your health insurance, but aren't too keen about the impending price hike, read on to find out how you might be able to get around it.

Take advantage of youth discounts

To try and fix the customer imbalance, the federal government rolled out health insurance reforms last year, which were designed to encourage young people to take out cover.

One of the changes gave insurers the power to offer discounts to anyone aged between 18 and 29 - but they're not obligated to give the discount, so always ask if you're not prompted.

The table below shows the discounts on offer for different ages:

Person's ageMaximum discount offered
18-2510%
268%
276%
284%
292%

Beat the deadline and prepay

If you prepay your premiums before 1 April, you can secure health insurance for last year's prices. Usually, insurance companies will let you prepay up to 12 months in advance - so you could get a year's worth of health insurance, at today's lower rates.

Some insurance companies will even apply further discounts if you set up a direct debit, or pay your premiums in a lump sum, so you save even more.

Compare how health insurers are raising prices

Premiums may be increasing by an industry average of 2.93% - but that doesn't mean every insurance company will be boosting prices by the same amount.

In fact, HBF has reported that it will only increase premiums by an average of 1.98% - on the flip side, MO has told customers to expect an average price hike of 5.63%

If your health insurer is reporting a particularly high price hike, it might be time to switch insurance companies and save on your premium.

The table below shows the degree to which different insurers are raising their prices.

Insurer2020
ACA Health Benefits Fund Limited3.94%
Australian Unity Health Limited2.79%
BUPA HI Pty Ltd3.26%
CBHS Corporate Health Pty Ltd2.37%
CBHS Health Fund Limited3.91%
Cessnock District Health Benefits Fund Limited3.96%
CUA Health Limited3.99%
Defence Health Limited3.49%
Doctors' Health Fund Pty Ltd3.29%
GMHBA Limited3.34%
HBF Health Limited1.98%
Health Care Insurance Ltd3.75%
Health Insurance Fund of Australia Limited5.58%
Health Partners Limited2.77%
health.com.au Pty Ltd3.94%
Hospitals Contribution Fund of Australia Ltd3.39%
Latrobe Health Services Limited3.49%
Medibank Private Limited3.27%
Mildura District Hospital Fund Ltd4.68%
MO Health Pty Ltd5.63%
National Health Benefits Australia Pty Ltd2.99%
Navy Health Ltd3.49%
NIB Health Funds Ltd2.90%
Nurses & Midwives Health Pty Ltd3.74%
Peoplecare Health Limited3.48%
Phoenix Health Fund Limited3.10%
Police Health Limited3.14%
Queensland Country Health Fund Ltd3.56%
Queensland Teachers' Union Health Fund Limited2.66%
Railway & Transport Health Fund Ltd2.91%
Reserve Bank Health Society Ltd3.08%
St Luke's Medical and Hospital Benefits Association2.90%
Teachers Federation Health Ltd3.24%
Transport Health Pty Ltd2.59%
Westfund Limited4.32%
Industry Weighted Average2.92%

Source: https://www1.health.gov.au/internet/main/publishing.nsf/Content/privatehealth-average-premium-round

Compare policies and change benefits

A 2017 Finder study found that, on average, Australians only switch health funds once every 11.8 years. But loyalty doesn't always pay off and you could be missing out on a better deal.

Your personal needs in 2008 may have been very different to what they are now. Are you still paying for pregnancy cover or reproductive services, when you're already happy with the size of your family? It might be time to consider the level of your coverage.

Remember, you can split your hospital and extras cover - so if you want gold standard hospital cover, but the bare basics in extras, that's no problem.

Picture: GettyImages

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