Private health premiums rising soon but not for everyone

The usual April 1 increase in health insurance costs comes with a twist this year, and some other changes that will help households.

Change is coming soon for health insurance, but for many Australians it won’t be an increase in premiums just yet.

The average premium rise in 2022 will be 2.7 per cent, with some customer facing increases more than 5 per cent.

However, a large proportion of insurance funds are delaying their rises beyond the traditional April 1 date because of the pandemic, while others have been handing back Covid-related refunds.

And families with adult children are expected to benefit soon from the Federal Government last year raising the age of dependants for private health insurance policies from 24 to 31.

Compare the Market health insurance spokesman Anthony Fleming says the funds still need to put processes in place to support the age change and he doesn’t expect it rolled out before June 30 “at this stage”.

Fleming says more than 35 per cent of the market has delayed premium increases this year, but this proportion is expected to grow.

ASK YOUR INSURER

“If you aren’t sure, it’s worth asking your insurer when they’re raising their prices, and to see if you can find a later one if that suits you better,” he says.

Consumer group CHOICE’s health insurance specialist Uta Mihm says three of the five biggest health funds have delayed premium increases.

Trudy Vains, right, with husband Craig and daughter Emily

“NIB and Medibank will increase on September 1 and HCF on November 1, so instead of just automatically prepaying on March 31, check the letter from your fund to time it right,” she says.

Trudy Vains took out health insurance six years ago after back surgery had left her $10,000 out of pocket.

She has been very happy with her insurer, which covered a spine fusion in 2019, and she will also benefit from this year’s premium delay.

“I have spoken with the team and they have said that all rates are frozen for an additional six months due to the pandemic,” says Vains, who reviews her policy regularly.

Many heath fund members got money back in the past year, with Bupa refunding an average $71 per customer in 2021.

Fleming says if you haven’t heard from your health fund, “send them a gentle reminder”, and if they’re not offering relief ask them what else they can do for you.

“All health funds have committed to returning any excess profits to members as a result of Covid-19 impacts to services,” he says.

“Some health funds have achieved this through cash refunds or credit on premiums, while other funds have done so via a range of financial support programs for members.”

HOW TO SAVE

The March 29 federal budget could unveil health-related sweeteners, Fleming says, particularly as it’s an election year, so keep an eye out.

He says people wanting to save money on health insurance should:

• Review their policy at least annually.

• Look for a compelling offer, with plenty on the market in March.

• Consider increasing their excess to reduce upfront premiums.

• Check if they use enough extras to make extras cover worthwhile.

Mihm says many people do not get value from their extras.

Health insurance premium rises have been delayed for millions of members.

“If you only have a check-up at the dentist and a couple of physio appointments a year, chances are you are one of them and could be better off getting rid of it,” she says.

Mihm says people who are not expecting a hospital visit in the next two years can increase the excess on their hospital policy to $750 for a single and $1500 for couple to save on the premium.

“Don’t just stay with a big insurer because you see their name everywhere,” she says.

“Health insurance is regulated and small insurers are just as safe as big ones, and they sometimes have the best deal.

“Make sure you compare your hospital cover at least once a year and don’t fall for a comparison site that only offers a few funds.”

AUSTRALIA’S BIGGEST HEALTH INSURERS

(By market share)

• Medibank (26.9 per cent)

• Bupa (25.4 per cent)

• HCF (11.7 per cent)

• Nib (9.2 per cent)

• HBF (7.3 per cent)

• Australian Unity (2.6 per cent)

• Teachers Health (2.5 per cent)

Source: Ombudsman.gov.au, Australian Prudential Regulation Authority

Originally published as Private health premiums rising soon but not for everyone