More than half of Australian health insurance holders are still awaiting their annual premium increase, creating a situation where familiar April hikes become overlooked until they impact personal bank balances. This intentional confusion tends to favour insurance providers.
What is the catch behind your health insurance policy?
While some have returned money to their members, don’t get fooled into thinking this balances out the upcoming premium increase. It’s money that you’re already owed from the Covid lockdowns when policyholders couldn’t use their cover. If the industry reverts back to having April 1 as the annual premium increase date, then over 50% of Australians with health cover will get two increases in just six months – which is one too many for the hip pocket.
While you might hear about an average premium increase of 2.90%, this figure pertains to the collective average across all health funds. The five largest funds – encompassing over three-quarters of all policies in the country – are enacting an average premium rise of 3.38%, translating to an extra $24 for family policies, according to Compare Club’s modelling.
But you must not assume that your insurer’s reported average rate increase mirrors your own. For instance, although HBF declared an average rate surge of 4.49% in April, certain family policies experienced hikes of up to 15%. Your insurer will have sent you a letter, so take time to calculate whether you’re getting stung with a higher than average rate rise.
Switching up an insurance provider might help
As so many Aussies are already struggling with the cost of living, the news that health funds will be raising their premiums again is another blow to their budgets. It’s understandable many people are now considering ditching their insurance altogether, but the good news is there are plenty of several ways to ease the financial pressure without having to give it up.
Many Aussies stay with the same health insurer longer than they stay married. It’s a cliche, but with health insurance, loyalty really doesn’t pay, so if you haven’t checked to see if you are on the best possible plan in the last 2-3 years, there’s a good chance you may be able to switch to a health fund charging a lower premium that might also provide better value.
If your premiums feel high and you haven’t switched policies in years, shop around. We’ve found that people are saving about $300 annually when they switch private health providers with Compare Club. Families can be big winners, with average savings of about $462.90.
How to get the best deal on your health insurance
There is a lot of competition between insurers for customers so there are some good deals available to new customers including discounts, more value for extras and even free cover for the first month. It’s possible to save hundreds of dollars a year on any level of cover by switching. Here are some of the best tips to help you save big on your health cover:
- Check you are on the best possible deal in the market – it’s possible to reduce your premium AND get better value by switching to another insurer.
- Check your extras. Adjusting these to something more suitable is the easiest way to get better value
- Don’t fear waiting periods. If you’re moving to a lower level of cover, you won’t have to serve any new waiting periods
- Even if you’re trading up, many funds are currently offering to waive 2&6 month waiting periods in the run up to 1 Oct.
- Some funds will offer you up to six weeks free when you switch
Kate Browne is the Head of Research at Compare Club.
