Australians urged to review their private health insurance cover before June 30
Australians looking to save cash are being urged to review their private health insurance cover before the end of the financial year.
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Private health insurance remains one of the biggest cost burdens for households and has resulted in thousands of Australians recently dropping cover.
Many cash-strapped customers have paused their insurance cover premiums during the pandemic, and the latest statistics from the Australian Prudential and Regulation Authority show 9760 people ditched their hospital cover in the March quarter.
Project manager Carla Knight, 32, and husband Paul, 35, this month took out a joint private health policy about four months after having their daughter, Olivia.
Ms Knight said she switched from ahm to NIB and lowered her hospital cover from gold to silver plus, removing coverage for obstetrics and gynaecology expenses.
“We wanted to all be on the same cover because we found it silly to be paying for two separate policies, and it’s ended up saving us about $125 per month,” she said.
“We ended up being $15,000 in out-of-pocket when we had Olivia, so it turns out I wasn’t covered for most things anyway so it was pretty pointless.”
They are now paying $240 per month or the equivalent of $2880 annually.
Australians who do not have cover should check ahead of June 30 if they have to pay the Medicare Levy Surcharge.
This is paid by taxpayers who do not have private hospital cover and earn above $90,000 for singles and $180,000 for couples. It is used as a deterrent to get people to sign up and reduce the demand on the public system.
Health insurance comparison website comparethemarket.com.au’s spokesman, Anthony Fleming, urged Australians to be aware of the lifetime health cover (LHC) loading.
“This is particularly important as we come up to the first of July and you are over the age of 31,” he said.
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“For every year you are without hospital cover over 31 there is loading added to your premium until you do take out health insurance.”
Private Health Insurance Intermediaries Association chief executive officer Christopher Zinn said the coronavirus pandemic had showed “cost pressures are so high on people”.
“Look at how you can get a similar standard of cover for less money: there are 35 health funds out there and there’s a big spread in terms of what they charge for largely similar but not identical cover,” he said.
Mr Zinn said reviewing your hospital cover excess – by increasing it up to $750 for singles and $1500 for couples and families – could save on your overall premium costs.
The annual premium rises, which usually occur on April 1, have been delayed this year until October.
There are also incentives on offer to get members to sign up including six weeks’ free cover and gift cards.