Millions of Australians with private health insurance could be paying more for their policies this year with a “perfect storm” putting pressure on premiums.
Health Minister Mark Butler has announced that he’s approved an average 3.73 per cent lift in private health insurance premiums as inflationary forces and tensions between hospitals, governments and insurers have weighed heavily on this year’s premium price negotiations.
The price hike will take effect on 1 April 2025.
Why the increase?
“The cost of delivering care, paying staff, and powering hospitals has all increased over the past year. On top of that, old red tape and regulations fixing the price of medical devices like prosthetics have kept costs incredibly high in Australia,” the Minister said.
In addition to this, we’ve also seen one of the country’s biggest hospital operators, Healthscope tear up its contracts with health funds over a funding dispute that could leave thousands of patients out-of-pocket.
All of these tensions are likely to have an impact on the cost of health cover this year.
Time to compare
It’s important customers be prepared as shopping for cheaper deals may be one of the only ways for some to avoid the sting.
Average health insurance premiums have increased just over 38 per cent in the past decade, but customers have not seen an annual rise of more than 5 per cent since 2016. Health insurance premiums must increase to keep up with the rising cost of healthcare; however, these annual increases must go through an approval process to ensure they are reasonable.
Last year, insurance companies, the Australian Prudential Regulation Authority (APRA) and The Department of Health agreed on an average premium increase of 3.03 per cent, which was below the level of inflation and wage growth at the time. This year it’s 3.73 per cent.
If you’re unhappy with how much your premium is increasing this year when you receive your updated policy information, run a quick comparison and see if another fund can offer similar cover or better value for a cheaper price.
Pay now and save
While the headline average figure is what everyone talks about, we know that there can be huge discrepancies between insurers and policies. Last year, we saw increases as low as 0.27 per cent and as high as 5.82 per cent at individual funds, so doing some research can make a big difference.
Some health insurers will even allow you to pay for your policy a year in advance, which means you can effectively lock in last year’s cheaper prices for the next 12 months if you pay before April 1.
FACEBOOK LIVE Q&A: Join Kochie and health insurance expert Stuart Omodei for a Q&A on March 11 to find out how to beat the health insurance price hike. RSVP HERE.
