Around 15 million Aussies with some form of private health care cover are about to feel the pinch of another rate rise on 1 April.
The government has approved an industry average price increase of 3.73 per cent – the biggest hike since 2018. But don’t be fooled by the headline figure because the impact varies massively between funds and individual policies.
Some of the nation’s popular funds (like Bupa, HCF, Medibank and NIB) are increasing premiums between 5-6 per cent which is above the industry average. Police Health Limited has the highest average increase – a whopping 9.56 per cent. In real terms, say your policy is $3,500 a year, do you really want to cop a possible $350 annual increase? I’d rather save it for a grocery shop or two.
But other plans are lifting premiums by just 1 per cent. That’s why the 3.73 per cent is a bit misleading.
Private health insurance premiums are one of our biggest household bills so it is essential you shop around and compare the market for the best deal, rather than just simply copping the premium increase. It could save you hundreds, maybe thousands, of dollars.
But let me first dispel a couple of common myths I come across which seem to be stopping people from changing policies:
- “If I switch to another insurer I’ll be locked out of some treatments because waiting periods will be reset.” – Not true. If you change to an equivalent (or lesser) plan, the new waiting periods are not reset by a new provider. But if you switch to an upgraded plan, then waiting periods could apply unless the new provider waives them as an incentive to change.
- “I have a medical condition which will increase my premium with a new provider because I am a higher risk.” – Not true. Private health insurance premiums are ‘community rated’ and not ‘risk rated’. I can understand why people are confused because if you’re a bad driver and have a lot of accidents, your car insurance premium will be higher to reflect the fact that you’re at a higher risk of having a bingle and making a claim. But with health insurance, even if you have a medical condition, you are rated the same as any other healthy Australian of your age and pay the same premium.
So there aren’t any barriers to you comparing the market and seeing if there’s a better deal for you. The first step is to put your policy under the microscope, do a pulse-check on features, and take a scalpel to some of the ‘extras’ you may not be using.
Here are my health insurance saving hacks, which aren’t as scary as you’d think.
Lock in last year’s prices
Some health funds will let you pay for your policy up to a year in advance. By paying 12 months upfront (before prices go up on 1 April), you can effectively turn back time on this year’s rate rise.
While not everyone is in the financial position to pay a year’s worth of premiums in one hit, this hack is a doozy if you can do it. Depending on your fund and your policy, this move could help you avoid hundreds of dollars in extra premiums.
Switch, don’t ditch!
If you’ve been with the same health fund for several years, you could be missing out on discounts and incentives reserved for new customers. Run a quick comparison and see if you can find a similar value for less.
Bump up your excess
Agreeing to a higher excess can be a great way to save on your regular premium, as long as you don’t mind paying more in the event you need to claim.
If you don’t have many hospital visits or treatments planned, and you have a bit of money stashed in your emergency fund, this could be a good option.
Work your perks and incentives
We’ve already started seeing health insurers offer an array of great perks and incentives to lure in new customers, including weeks of free membership, waived waiting periods, access to frequent flyer points, rewards programs and more. If you can find cheaper cover, these offers are a great way to sweeten the deal.
Consider flying solo
Just because you’re in a relationship doesn’t mean you need to do everything together … and that includes your health policy!
Depending on your personal circumstances, the level of cover each partner takes out, whether you’re buying a hospital, combined or extras policy, and the insurer you choose, it may work out cheaper to take out two individual policies.
Switch to a lower level of cover
All that glitters is not gold! Unless you need cover for pregnancy, sleep studies or weight loss surgery, you might be better off on a lower level of cover. Even a Silver Plus policy, which is very comprehensive, will cost a lot less than top-tier Gold cover.
Speak to an expert and see if a lower level of cover might better suit your needs and budget.
Use or lose extras
Remember to turn your extras on and off as you need them. If you only need new glasses every five years there’s probably no need to pay for the privilege in between, until you want to reset the waiting period.
Some extras policies can include benefits like massage, acupuncture and even hypnotherapy. If you’re using them, great. If you’re not, time to lose them!
