Health fund members brace as insurers end pandemic relief

Nearly three quarters of Australians with health insurance face a cost increase on November 1. Here’s what they can do now.

Health fund members are being urged to check their cover ahead of November 1 premium rises by insurers covering more than 70 per cent of Australians.

Many major health funds delayed their traditional April 1 premium increases because Covid-19 impacts but the relief disappears soon and some members may face two rises in five months.

Comparison website iSelect’s spokeswoman, Sophie Ryan, says the timing adds extra pressure to households already doing it tough, and there are several ways to save money on health cover.

“On November 1, temporary financial relief will be over for millions of Australians covered by private health insurance, with Medibank/ahm, Bupa, nib and HCF – which combined have over 70 per cent market share – increasing premiums by an average of between 2.66 per cent and 3.18 per cent,” she says.

iSelect’s Sophie Ryan says consumers can save by shopping around. Picture: Supplied

The premium rises are being offset in some cases by at least 15 private health funds refunding hundreds of millions of dollars of their pandemic savings. Some have already paid refunds while others will by December.

Ryan says people who have not checked their cover recently may find they are paying for services they no longer need, and could save money by shopping around.

“Many people think that by changing policy or provider they’ll lose their hospital waiting periods but in many cases this simply isn’t true,” she says.

“Consider setting up direct debit instead of paying by credit card. Some funds will give you a discount for doing this.

“To save money on your premiums, you could also consider opting for a higher excess. Generally, the higher the excess or co-payment you are willing to pay, the lower the premium.”

Compare The Market’s general manager of health insurance, Anthony Fleming, says people who prepay 12 months of insurance now can lock in today’s lower prices before the November 1 rise, which averages 2.7 per cent across funds.

Health insurance premium rises on November 1 average 2.7 per cent. Source: iStock.

“Even if you pay in advance, you can switch at any time if you find a better deal,” he says.

“Some funds that are increasing in November could be increasing again as early as April 2023, as per the normal rate rise cycle.”

Fleming says there are always alternative offers available in health insurance and it is “better to switch than ditch your product”.

“Although these rate rises might hit the Aussie hip pocket hard, private health insurance is now more important than ever before, with the public health system overwhelmed by a bottleneck of surgeries and procedures,” he says.

Figures from financial regulator APRA show that 11.7 million Australians have private hospital cover, while 14.3 million people have private extras cover. Both types of cover have been gaining members since 2020 after several years of falling membership before the pandemic.

Originally published as Health fund members brace as insurers end pandemic relief