Why your health insurance could soon cost more
While health insurers usually adjust their premiums on April 1 each year, many funds chose to delay the adjustment to help ease the financial pressures many Aussies are facing.
But with the cost of health services increasing and the cost to treat patients also rising, health insurers have no choice but to pass some of these costs on to customers.
It comes as findings from Compare the Market's July survey of 1004 adults found that 22.1% have avoided seeking professional help for a health issue because they were worried about the cost.
While a 3.33% increase may not sound like much, the impact can be significant. One Compare the Market customer with a HCF Hospital Standard Silver Plus $500 Excess and HCF Mid Extras policy received a renewal letter informing them that their premium will increase by $12.20 a month. That's $146.40 a year.
Another, with a Hospital Advanced Savings Silver Plus $450 Excess and Multicover policy, was told their premium would jump $9.95 a month from 1 September - a $119.40 annual increase.
It's important to know that while prices for some members will increase by an average of 3.33% on September 1, the actual increase varies based on many factors, including the type of policy you hold, where in the country you live, if you're on a more basic or comprehensive plan and if you're on a single, family or couples policy.
Some Australians also pay the lifetime health cover loading, which increases the cost of a hospital policy by a percentage of the base premium when joining on or after your base date. For most people, this will be July 1 following your 31st birthday.
Others are eligible for the age-based discount, which entitled young Australians who take out hospital cover before they turn 30 to a discount on their hospital premium with eligible health funds.
If you're impacted by the rate hike, you should've already received a premium increase notification. However, it's vital that you compare policies when the renewal comes through to ensure you get the best value possible for your needs.
We know that the average increase across all health funds is 2.9%, so there may be an opportunity to pay less for the same level of cover. In the same way that you'd compare the price for groceries, fuel and other big-ticket items, it may be possible to find an equal level of cover with a lower premium.
There are also several competitive offers available that include perks like waiting period waivers, free coverage for a limited time or other initiatives such as access to wellbeing and rewards programs. These perks can vary between providers, which is why it's important to compare.
Use your renewal as an opportunity to ensure your health insurance is still adequate for your needs. If your health circumstances have changed, you may be over-insured with your current policy and could save by switching to a lower level of cover that still includes the services that are important to you.
It's better to switch policies and maintain the cover you need than to ditch it altogether, as you never know when you'll need to rely on your health insurance.
Those pressures on the public system won't be going away any time soon and health insurance gives you greater choice in how and when you receive inpatient hospital care and helps you access treatment for elective surgeries faster by avoiding the public waitlist.
Switching to a new health insurance policy isn't as hard as you'd think. If you do switch, your new fund will recognise any waiting periods you've already served. However, you'll still need to wait for any new or upgraded services and benefits.
Before switching or taking out a new policy, ensure you've read your policy brochure carefully. Be aware of any inclusions or exclusions, as well as any waiting periods, excess amounts and more, as these can vary between funds.
HCF isn't the only health insurer increasing funds. On October 1, NIB, Bupa, GMHBA, Frank, Qantas and Defence Health will all increase their premiums. Meanwhile, those with HUF will see their prices rise from November 1.
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