Do you have health insurance? Because it’s about to get more expensive
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 age | Maximum discount offered |
|---|---|
| 18-25 | 10% |
| 26 | 8% |
| 27 | 6% |
| 28 | 4% |
| 29 | 2% |
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.
| Insurer | 2020 |
|---|---|
| ACA Health Benefits Fund Limited | 3.94% |
| Australian Unity Health Limited | 2.79% |
| BUPA HI Pty Ltd | 3.26% |
| CBHS Corporate Health Pty Ltd | 2.37% |
| CBHS Health Fund Limited | 3.91% |
| Cessnock District Health Benefits Fund Limited | 3.96% |
| CUA Health Limited | 3.99% |
| Defence Health Limited | 3.49% |
| Doctors' Health Fund Pty Ltd | 3.29% |
| GMHBA Limited | 3.34% |
| HBF Health Limited | 1.98% |
| Health Care Insurance Ltd | 3.75% |
| Health Insurance Fund of Australia Limited | 5.58% |
| Health Partners Limited | 2.77% |
| health.com.au Pty Ltd | 3.94% |
| Hospitals Contribution Fund of Australia Ltd | 3.39% |
| Latrobe Health Services Limited | 3.49% |
| Medibank Private Limited | 3.27% |
| Mildura District Hospital Fund Ltd | 4.68% |
| MO Health Pty Ltd | 5.63% |
| National Health Benefits Australia Pty Ltd | 2.99% |
| Navy Health Ltd | 3.49% |
| NIB Health Funds Ltd | 2.90% |
| Nurses & Midwives Health Pty Ltd | 3.74% |
| Peoplecare Health Limited | 3.48% |
| Phoenix Health Fund Limited | 3.10% |
| Police Health Limited | 3.14% |
| Queensland Country Health Fund Ltd | 3.56% |
| Queensland Teachers' Union Health Fund Limited | 2.66% |
| Railway & Transport Health Fund Ltd | 2.91% |
| Reserve Bank Health Society Ltd | 3.08% |
| St Luke's Medical and Hospital Benefits Association | 2.90% |
| Teachers Federation Health Ltd | 3.24% |
| Transport Health Pty Ltd | 2.59% |
| Westfund Limited | 4.32% |
| Industry Weighted Average | 2.92% |
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
