Last day to get health insurance before the price rise

Richard Laycock 31 March 2017 NEWS

Couple in kitchen buying cover online with credit card using a tablet.

Lock in your premiums before the 1 April rise.

Today is your last day to lock in your health insurance premiums before they rise by an average 4.84% on 1 April 2017, raising the average cost of a combined hospital and extras policy by roughly $200 per year.

The cost of an average combined hospital and extras policy will jump from $4,014.86 to $4,215.36, which is an unnecessary additional expense that many Australians will be unable to afford as wage growth has been stagnant in recent years. The gap between health insurance increases and the private health insurance rebate has also been widening, increasing how much Australians are spending on health insurance.

The rising costs of health insurance has forced many Australians to reconsider their need for health insurance, with roughly 36% of saying that they were willing to leave their current health fund and 22% saying that they were planning to ditch their health insurance if premiums rose by an average of 5%.

In order to curb this growing disaffection with health insurance, Bupa have backed the introduction of a Lifetime Health Cover Discount, which would reward those taking out cover between the ages of 25 and 30 by giving them up to a 10% discount on their annual premiums.

If you are planning on getting cover with rate protection before the 1 April cut off, be prepared to pay those annual premiums upfront. While this is quite a large initial financial outlay, not only will you be benefiting from "discounted premium" (ie locking them in before the increase on 1 April), depending on the fund you switch to you may be able to save a little extra. Some health funds in Australia offer a discount of between 2% and 4% for those who pay their premiums upfront or by direct debit.

Before choosing a new fund, make sure you've done your homework. Review how the fund has performed in recent years both in regard to how much its premiums have risen but also how it is rated by its own members.

You may also want to review the incentives on offer to Aussies looking to switch health funds. While only 41% of Australians have taken advantage of these deals before, they can be a good point of difference when trying to make a decision between two similar policies.

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