If you are one of the 10.7 million Australians with health insurance, you may be aware that the biggest increase in health insurance premiums in almost a decade has just kicked in. But what does it mean for you?
Health insurance premiums rise every year on 1 April, but this year Federal Health Minister Peter Dutton approved an average increase of 6.2 percent – in 2013, the average increase in premiums was 5.6 percent. The increase represents an average yearly increase of $78 for singles and $175 for families.
As the 6.2 percent figure is the average, some health fund premiums will rise more, while others may pass on lower premium increases. For example, NIB is increasing its premiums by 7.99 percent.
It’s also worth keeping in mind that while most insurance companies apply the premium rises instantly, others wait until the middle of the year, so check with your insurer on when the new charges will apply to you.
The rising cost of healthcare
Health insurance premiums rise to deal with increased healthcare costs due to a number of factors. These include our increasingly ageing population as well as the rising cost of new technologies and medical equipment. A higher incidence of conditions such as obesity and diabetes is also adding to healthcare costs, and to health insurers’ pay-out bills.
While yesterday’s premium rise is higher than previous increases, the government estimates that the cost to health insurers of paying out benefits to medical providers has increased by 8 percent in the past 12 months.
Should you shop around for a better deal?
Unless you already locked in the previous year’s price by paying a year’s worth of premiums in advance, there is no way of avoiding the increased premiums now. However, it’s never too late to shop around for a better deal.
Shaun Hubner of John Small Health Advisory recommends that people review their health policy every two to three years. “Prices are what prices are, however a lot of people are on covers they’ve held for years, and they’re not competitive with other newer products on the market,” he says.
“Even though premiums have gone up, now is still the time to compare prices. In many cases, people can save $20 to $30 a month on their premiums by shopping around and seeing what else is out there.”
Even if you decide not to switch to another insurance policy, you should check whether there have been any changes to your current policy’s coverage, benefits, annual limits and other features of your cover.
Reassessing your current health insurance policy, along with your current home loan, credit card or savings account, could save you a bundle. Visit the RateCity news page for all the latest money saving tips.