Health insurance will be more expensive from next month, with customers of Australia’s biggest providers set to spend over $100 more on payments a year.
The average premium hike is set to be 2.7 per cent, but financial marketplace company Compare Club data revealed that 75 per cent of Australians with private health insurance will face an increase as high as 2.92 per cent.
Australians over 50, seniors and families – demographics which tend to have the highest premiums – will be most affected by the rise.
The private health insurance price hike usually occurs in April, but large providers including Medibank, Bupa, HCF and nib delayed the increase until November 1.
This is largely due to money that insurance providers saved while pandemic restrictions prevented many customers from getting elective surgeries and claiming extras.
Costs to health
Chris Stanley, sales and operations manager at Compare Club, said the price hikes will particularly sting given the rising cost of living, with Australians’ budgets already stretched to afford more expensive petrol, mortgages, and food.
A Suicide Prevention Australia report showed the soaring cost of living and personal debt is the biggest threat to mental health for the first time in the country, with 40 per cent of Australians feeling more distressed over finances compared to last year.
“Even though it’s a conservative increase on health insurance, it’s really going to hit home this year,” Mr Stanley said.
Compare Club data shows a 65-year-old couple on one of the four major health funds will be paying an average of $167 per year extra after the premium hike, and a family with parents in their mid-40s can expect to pay an average of $147 more per year.
But insurance providers looking to hook new customers are giving offers to soften the blow of rising premiums.
Medibank is temporarily offering new members six weeks free, gift cards worth hundreds of dollars, and is waiving waiting periods on extras.
Bupa and nib are offering similar deals.
Select cover to meet needs
Choice health insurance expert Uta Mihm said if you’re looking around for the best deal, then consider smaller funds.
“There’s a lot of smaller funds who have very competitive deals,” Ms Mihm said.
“Also, there are quite a few smaller providers who have very low levels of complaints, [customers] seem to be satisfied.”
When thinking about switching your health insurance package or provider, Ms Mihm said to get a level of cover that meets your needs – and doesn’t exceed them.
Choice data shows of the 11.5 million Australians covered for hospital treatment, more than one in three have purchased the most expensive, maximum level of cover with no exclusions.
These ‘gold’ level policies can cost almost twice as much as the cheapest ‘silver’ policy offered by the same provider.
The highest-level policies are good if you’re planning to get pregnant, or will soon need elective surgeries, but silver policies often offer many of the most sought-after perks.
“Silver is a pretty good level of cover because it includes nearly all cancer surgeries and treatments, heart disease, lung disease and lots of other things,” Ms Mihm said.
And don’t forget to consider restricted membership providers.
Insurers such as CBHS and Teachers Health will accept family members of eligible current and former Commonwealth Bank employees and education workers, respectively.
Although the rising cost of health insurance might be a turn-off given Australia has an internationally respected public health system, Ms Mihm said blown-out elective surgery waiting lists exacerbated by pandemic restrictions could be reason enough for private health care.
Australians earning above base income thresholds of $90,000 for singles and $180,000 for families are also subject to a Medicare levy surcharge if they don’t have private health cover.
