Private health insurance costs are on the way up and so too it seems are the number of people ditching specialised cover.
Last week, the government gave the go ahead to an average premium increase of 4.8 per cent, or an average $2 a week for some families, just in time for Valentines Day on Tuesday.
Now whether you choose to mark Valentines Day or not, is a lot like whether you choose to have private health cover – both are nice to have and can make you feel good, but let’s face it, both can be really expensive.
Most of us would love to have special cover to help us afford top specialistists if we needed them, but in reality not all of us feel the love for private health because it’s just becoming unaffordable for many Australians.
Fairfax Media reports that since 2009, the average health insurance premium has risen about 50 per cent to around $5000 for families.
Finder.com.au also estimates that 6.5 million Australians will now review, and potentially ditch, their health insurance policies before April 1 2017, because of the latest price hike.
That assumption has been based on a survey of 2,031 Australians, which found more than one in three would switch providers for a better deal, while almost one in four would abandon their cover altogether if their health fund raised their premiums by over 5 per cent this year.
Bessie Hassan, spokesperson at finder.com.au, said the cost of private health insurance, which ranges from $28.55 per month for the cheapest basic hospital cover to $317.45 for top cover, was outweighing the benefits for thousands of policyholders.
According to research by finder.com.au, Australians will be paying an extra $191 on average this year, with the average cost of hospital and extras cover in Australia to rise to $4,138.50.
“Each health insurer will raise its premium at a different rate, for example out of the big four health funds, not-for-profit HCF has the lowest average increase, raising its premiums by just 3.65 per cent, while outside of the big four, the restricted fund CBHS has the lowest average increase, with its premiums going up by just 2.98 per cent, says Ms Hassan.
Here are some tips from Financy and finder.com.au tips for beating the health insurance price hike:
- Call your health insurance provide – Ask them are you in deficit or surplus when it comes to what you have paid out on private health insurance costs. See this Financy article to help you understand this concept better.
- Review your current cover – Look at what you’ve claimed for over the last 12 months. Are you paying for extras that you don’t need? If yes, then you might be better off switching to a lower cover with less extras or or taking out hospital only cover.
- Pay 12 months upfront – If you can afford it, pay your annual premium upfront before April. Not only will you be able to lock-in a price based on current costs but many health insurers offer additional incentives, for example HIF offers a 4 per cent discount for annual payments.
- Mix and match – You might be better off taking out hospital cover with one insurer and extras cover with another for a policy tailored specifically to your needs.
Also check out these tables as they might help you compare what you’re paying with the average family in your state.
Family hospital cover by state (most expensive to least expensive)
|State||Current average monthly premium (rounded)||Current average annual premium (rounded)||Average annual premium with 4.8% increase (rounded)||Annual difference (rounded)|
Family hospital & extras cover by state (most expensive to least expensive)
|State||Average monthly (rounded)||Average annually (rounded)||Average annually with 4.8% increase (rounded)||Annual difference (rounded)|