Health insurance premium rise hurting senior hip pockets
Those on the aged pension will struggle with the price hike.
As the price of health insurance soars ever higher, much of the hullabaloo at this time of year centres around how these price hikes will impact the average Australian family. The effect of these rate hikes on working families is universal. However, one group in particular that may need more attention is seniors.
According to the Australian Bureau of Statistics (ABS) Australian Demographic Statistics, Jun 2016,in the last 20 years the proportion of Australians aged over 65 has increased by 3.3%, rising from 12% in 1996 to 15.3% in 2017, meaning there are roughly 3.6 million seniors in Australia.
Seniors are affected by these price increases in two ways: "seniors policies" are generally more expensive and health insurance premium rises are outpacing inflation.
When you apply for health insurance online, you may be asked to enter your age or check a box if you're over 65. While health insurance premiums don't become more expensive as you get older, the type of cover that is "recommended" to a senior is pricier. These policies are more expensive as they offer more than just your basic level of cover and they have higher limits for services such as cardiology.
Last year, an average single combined hospital and extras policy for a senior would have cost $3,972. Now, if you factor in the fact that premiums are rising by an average of 4.84% in 2017, that same policy will cost you $180 more after the rate hike. Which brings us to why inflation is so relevant.
While not every senior receives an aged pension, it is a reality for many older Australians and the pension rises in line with CPI. Since 2010, CPI and pension growth have been outpaced by health insurance premium rises, which is troubling for people who are on fixed incomes. This is forcing some seniors to reevaluate their health fund.
Health funds have begun to notify their members about premium increases and we have received comments from some our users who will have trouble paying for their health insurance because of the increased rate. If you're looking for ways to reduce your health insurance outgoings, here are a few tips:
- Review your cover. Make sure you're not paying for a policy with benefits that are no longer necessary to you, such as cover for pregnancy.
- Shop around. At this time of year, many health funds are offering deals and incentives to switch to their fund.
- Pay upfront. This can be hard if you're on a fixed income, but you can avoid the premium rate rise if you prepay for your health insurance before 1 April. Some funds also offer an additional 4% discount for members who pay their premiums annually.
- See if you're entitled to a discount. If you're a member of a seniors organisation, check to see if they have a deal with a health fund. For example, National Seniors Australia members can save 6% on health cover with nib.
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