Millions of Australians face more financial pressure when health insurers raise the price of coverage from November 1.
Health cover will increase for about 5.3 million customers, with nib, HCF and Bupa all upping their premiums by an average of 2.7 to 3 per cent.
Medibank has deferred its increases until January following a major cyber attack.
Single father of two, David, has had private health insurance for 15 years but says he might be “forced out” after premiums rise this week.
He told The New Daily that mounting inflation, the cost of living and now higher premiums made health insurance unaffordable.
“I’ve already moved to a cheaper plan because it’s money that I was spending that I can’t afford, for minimal benefit,” David said.
“Prices just keep going up … and the benefit I was getting … it just felt like a con.”
Typically, Australian health funds lift prices on April 1, but several big funds delayed their price increases by six months.
Funds made record profits during the COVID-19 pandemic when customers couldn’t claim, so the delayed price rise is a way of compensating their members.
Discretionary spending axed
But this month’s price increases add more pressure to household budgets.
Finder’s health insurance expert Tim Bennett said when the cost of living increases, discretionary purchases like insurance are the first things axed in household budgets.
“It makes it more difficult to justify having these sort of rainy day products when every day is a bit of a rainy day,” Mr Bennett told TND.
“In that sense, these price rises come at a horrible time. However, I would underline that health insurance can be really important to have if something goes wrong.”
According to data from iSelect, the premium hikes will cost families an extra $125 per year on average and $58 more a year on average for singles.
iSelect spokesperson Sophie Ryan told TND that while the hikes may sound small, they will be an unwelcome burden for struggling families.
“We know many families are struggling financially at the moment … and the timing of these increases adds pressure to many households doing it tough financially,” Ms Ryan said.
Review your policy
What can you do when your premiums go up?
Simple – review your existing policy and make sure it suits your needs.
There are online resources, such as this comparison tool by Finder, which will help you find the best deal.
Once you sign up for a new policy your new provider will manage the switch.
Ms Ryan said now would be a good time for consumers to look for ways to save money on private health insurance.
“I encourage people to review their cover to ensure that they’re still getting a good deal,” she said.
“If your health insurance premium went up this year … and you haven’t reviewed your policy, it may no longer be suitable for your personal circumstances.
“You could be paying unnecessarily for things you no longer need or not be covered for things you do.”
A spokesperson for nib told TND that premiums were going up to keep up with claims inflation, and said that the insurer was “very aware that our members, their families and communities face cost-of-living pressures”.
A Bupa spokesperson said the fund continues to focus on “providing our customers with affordable and relevant products and services that meet their changing needs”.
“We have balanced the needs of our customers to deliver high-value care with rising health care costs – and that’s why our premium increase is the second lowest in 20 years.”
