Health insurance premiums tipped to rise by 5%
It looks like health insurance costs are set to go up again.
Health insurance premiums look set to rise once more in 2017, this year by an expected 5%, according to The Guardian.
The deadline for private health insurers wanting to submit increases to their premiums closed on Monday 16 January. The government can approve or reject the requests.
The 5% premium increase would be the lowest industry weighted average increase since the Department of Health started tracking the increases in 2010. However, this increase may be more than many consumers can bear.
A survey of 2,005 Australians conducted by finder.com.au at the end of 2016 found that 15% of the people surveyed planned on cancelling their private health insurance policy, with almost half blaming the ever increasing costs of holding a policy.
| Reasons | Proportion |
|---|---|
| Too expensive | 44.70% |
| I don't get enough back in rebates | 14.20% |
| Cover doesn't suit me | 10.30% |
| I'm already fit and healthy | 5.80% |
| I'm not sure what I'm covered for | 4.80% |
| I'm under 30 and there are no penalties for not having cover | 4.80% |
| The claims process is too complicated | 3.90% |
Wage growth fell to a record low at the end of last year and as of the September quarter was below 2%, according to the Australian Bureau of Statistics Wage Price Index. This figure shows a continued trend where wage growth continues to be outstripped by rising health insurance premiums.
Satisfaction levels with Australian health insurers has also been dropping. A Roy Morgan survey conducted in September last year, found that 1 in 10 Australians would consider leaving their current fund in the next 12 months. The study also found that satisfaction levels declined September year on year from 76.3% to 74.4%.
While this these satisfactions are far from their lows experienced only a decade ago where satisfaction was at 66.4%, with the average combined hospital and extras policy coming in around $330 per month, it's little wonder that many Australians are considering ditching their cover.
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