As of the beginning of April 2021, private health insurance premiums have increased – the second hike in 6 months for some insurers. In general, premiums rise once annually, but the increase was postponed until October last year due to COVID-19. This new increase as of April makes private hospital cover more expensive for Australians, coupled with a decrease in the health insurance rebate. However, it’s actually one of the lowest increases in premiums we have seen in the last decade.
There are several factors that are taken into consideration by private health insurers when they increase their premiums. Each insurer has seen a variable rate of increase, so it’s a good time to re-examine your policy, and see if there are any changes you need to make or any potential savings by switching providers. With the uncertainty around the COVID-19 pandemic, in the last 12 months more people have been seeking private health cover than ever. Here are some things to consider before you decide on a policy or insurer, and things to look into now that premiums have increased.
Why the increase?
Private health insurers are citing a rise in claims, high cost of claims, and medical inflation as some of the main reasons for the rise in premiums. The rate of increase for health insurance premiums is higher than the general rise of inflation, as the cost of healthcare and medical treatment is rising faster.
There are, on average, 3% more hospital claims each year, due largely to our ageing population. This drives the cost of hospital cover up, as it is more costly for insurers to provide this cover. The rate of claims each year is increasing, alongside the cost of each claim.
Each health fund has to submit their proposed increases to the Federal Government for approval before enforcing the higher premiums, so rest assured all increases are seen to be sustainable and necessary.
How does it affect me?
With the increases seen in April, singles will pay, on average, an extra $59.28 per year for health insurance. Families will pay, on average, $126.88 more per year. These figures are based on the average private health insurance rise of 2.74%, but some insurances have raised their premiums by only 0.5%, where others have increased by 5.47%. How the increase in pricing affects you will depend on your policy and insurer, and their rate of increase. Before premiums went up, you should have received a statement from your provider alerting you to the increase.
Compare policies and find lower premiums
It’s worth shopping around, and seeing what other insurers can offer you. Compare policies, and find the most competitive premium for your needs. Don’t necessarily go straight for the provider that had the lowest rate of increase during the April premium rise – they may still have more expensive premiums overall.
A few insurers delayed their price increase until July 2021. It may be worth looking into, and if you can afford to pay 12 months upfront, you may be able to lock in 12 months of cover at the price before the increase.
A provider that is most affordable for some, will be too costly for others – it comes down to your individual needs and what cover you are seeking. If you have researched a health insurance provider in the past, don’t necessarily rule them out now without looking into them again, as things may have changed.
Re-examine your cover
Life changes, insurer policy changes, your budget changes – it’s worth re-examining your insurance cover to see if you are paying for inclusions you don’t need, or to see if you can make adjustments. For example, remove maternity cover if you know you won’t need to make maternity or birth-related claims. But be mindful of waiting periods, and make sure you plan ahead for long waiting periods, such as maternity.
Your policy should suit your needs, lifestyle and budget, and if it no longer does, make adjustments or try another provider. Safeguard against future health concerns for peace of mind, and to save stress down the road.
Why do I need private health insurance?
It can be easy to see the rise in premiums and wonder if having private health insurance is even worth it. But private health insurance will offer you peace of mind, safety, and security around your healthcare and well-being.
With private health cover, you can avoid public hospital waiting times, which can be very long at the moment due to COVID-19. Elective surgeries were halted for much of 2020, and there is still a backlog today. Private health cover will help you skip the long wait for your surgery or care.
You will be able to choose your doctor or medical professional if you have private health insurance, allowing you to find the best person with whom you feel comfortable and cared for. There are great value extras available with many insurers, offering deals with dental, mental health management, and other specialisations.
What do I do now?
Although the rise to health insurance premiums can seem like a lot, they are actually some of the lowest premium increases we have seen in the last decade. It can feel overwhelming to start examining your current policy and to consider other providers for the best possible deal. Your Insurance Broker in Perth will be able to help you understand the private health insurance rate hikes, and ensure you have the best policy in place to fit the needs of you and your family.