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Check the cost of health insurance

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The end of the financial year is rapidly approaching, which means it's time to sort through your financial statements and analyse your expenses. One expense that you'll probably be hit with in the coming year is health insurance, as the cost of private cover has soared.

Figures from the Department of Health show that premiums rose by a weighted average of 5.59% in 2016, with the highest spike coming from CUA at 8.95%. Gap fees are also getting bigger, with research from Finder showing gap fees for hospital treatment are up 4.1%. The average gap is around $304.86, which is only expected to grow thanks to the profits being raked in by private insurers.

Michelle Hutchison, from Finder, says people should take advantage of the new financial year to look at their premiums and work out which fund gives them better value.

health insurance

"Now is the time for customers to consider whether their policy is covering what they need and is the best value for money," she says. "With just over two weeks to go until the end of the financial year, it's important to shop around and compare policies."

To make sure you're getting the best bang for your buck, visit the Department of Health's website to see how your premiums compare. Another way to reduce costs is to talk to your healthcare provider about gap cover, and research whether it would be cost effective for you to take advantage of it if it's available. For tips on how to compare funds, see here.

Things to remember:

  • If you don't have health insurance and you're about to turn 30, you should consider whether you'll need it in the future. The lifetime health cover loading applies from your 30th birthday, so if you take out insurance after that you'll be hit with a 2% cumulative loading on your premium each year.
  • If your income exceeds $90,000 as a single or $180,000 for couples and you don't have private hospital cover, you'll probably be hit with the Medicare levy surcharge. For singles, an appropriate level of cover must have an excess of $500 or less. Couples or families must have an excess of $1000 or less. Avoid the surcharge by taking out insurance before June 30.

Insurance premium rises, 2016

Australian Unity Health 5.05%
BUPA 5.69%
CUA 8.95%
HCF 5.42%
Latrobe 5.52%
Medibank Private 5.64%
NIB 5.55%

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Steph Nash was a staff writer at Money until 2017.
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