Money
Take control of your health insurance and stop paying more than you need to
Health insurance premiums creeping up? Here’s how to check your cover, compare plans and keep more money in your pocket.
By Bron Maxabella
With the cost of living continuing to climb and household budgets feeling the squeeze, keeping your expenses from creeping up is critical. Private health insurance premiums are definitely an area that 'creeps' - every April the 13.6 million Australians with private health cover face an increase. And this year, for most of us that increase was substantial.
Why does health insurance keep rising?
In April, the government approved an average premium increase of 3.73%, but remember – that’s just an average. Some insurers hiked their prices much more than that (Medibank, Bupa, NIB and HCF are among them), while others kept their increases to a minimum (HBF, HIF and Phoenix Health saw some of the smallest increases). Even within the same insurer, different plans saw different levels of increase.
Health insurers say that annual premium increases are necessary to cover rising healthcare costs. This year the price increases were particularly high due to several factors, including:
More expensive surgeries: Advanced treatment options including robotic surgeries and other advanced solutions means surgeries are more complex and costing more.
Staffing costs have increased: Staff shortages across the healthcare industry have driven wages higher in both the public and private sectors.
More people are choosing private hospitals: Public waiting lists have grown too long for many Aussies, so they’re turning to private options instead. This increases claim volumes for insurers and pushes costs up.
Increased demand for mental health services: Private mental health admissions have been steadily increasing since the pandemic. A shortage of both places and staff means prices have risen along with the demand.
Who raised premiums the most (and least)?
Here’s a snapshot of the 5 biggest health funds and their increases (note that all but HBF were higher than the industry average):
- NIB – 5.79%
- Bupa – 5.1%
- HCF – 4.95%
- Medibank – 3.99%
- HBF – 2.8%
Here’s a snapshot of the 5 funds with the biggest increases:
- Police Health – 9.56%
- NIB – 5.79%
- AIA – 5.7%
- Bupa – 5.1%
- HCF – 4.95%
And the 5 funds with the lowest increases:
- HIF – 1.91%
- Phoenix Health - 2.43%
- GMHBA – 2.44%
- HBF – 2.8%
- CBHS – 2.84%
* Source: Department of Health and Aged Care. See all data
Time for a health insurance check-up
It’s a good idea to give your policy a regular ‘health check’ to ensure you’re getting the best value for your money. It's a straightforward thing to do and there are tools to help ake it as simple as possible.
1. Does your insurance suit your needs?
Start by asking yourself whether your current cover still suits your needs and lifestyle.
- Are you paying for extras you’re simply not using?
- Do your insurer’s claim limits on extras suit your needs?
- Are any specialists you want to see covered by your policy?
- Does the hospital you would likely be treated at participate in your insurer’s gap cover scheme?
- Are you still paying health insurance for your children when a separate plan may be more cost-effective?
- Does the excess on your policy still suit your financial needs?
Other questions will arise that are specific to your own personal needs and you can find guidance at PrivateHealth.gov.au.
2. Does your plan offer the best available value?
Once you’ve worked out exactly what you need, the next step is to compare your current plan with what’s on offer in the market.
A comparison website like Compare the Market makes this easy.
If you find a better deal elsewhere and your current insurer won't match it, be prepared to switch health insurers - it's much more straightforward than you probably think...
Switching health insurers: myths vs reality
Many people worry that changing health insurers will mean losing cover or facing a massive premium hike if they have pre-existing conditions. But both of these are actually myths.
Your health status doesn’t affect your premium
Unlike home and contents insurance, private health insurance is community rated, not risk rated – meaning your health status doesn’t affect your premium. The community rating system means that everyone is entitled to buy the same health cover, at the same price, regardless of age, sex, race, health status or claims history.
Waiting periods carry across insurers
Another common concern is over waiting periods when switching insurers. But if you move to a policy with the same (or lower) level of cover, by law you don’t need to serve any additional waiting periods.
If you’re upgrading to a higher level of cover, then yes, waiting periods might apply – but many funds offer incentives at this time of year, including waiving waiting periods altogether.
Reviewing your cover could save you hundreds
Private health insurance can feel complicated, and there are plenty of misconceptions out there. But taking the time to review your cover now could save you hundreds - if not thousands - of dollars in the long run.
Now’s the perfect time to compare your options and make sure you’re not paying for extras you don’t need. A little bit of research could go a long way toward easing the pressure on your budget!
Feature image: iStock/izusek
Citro may receive a small commission at no cost to you on any insurance policies placed through Compare the Market using the links in this article.
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