How to avoid paying the health insurance premium price increase
The cost of private health insurance is going up again but, if you act quickly, you might be able to avoid having to pay extra.
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Every year the Federal Government announces an annual price increase in private health insurance premiums, but you don’t necessarily have to pay the extra.
In 2022, health insurance premiums will rise by an average of 2.70 per cent, making it the lowest premium increase in over a decade.
But that’s just an average, which means some funds may opt to go higher than that.
Spokesperson from health insurance comparison service iSelect, Jessie Peterd, said although the increase might be unwelcome news for many still doing it tough due to the financial effects of COVID-19, the pandemic had also highlighted the importance of health cover during a time of uncertainty.
“The COVID-19 pandemic has reminded us just how precious our health and wellbeing is and shown that the peace of mind private health insurance provides is arguably more valuable than ever, especially as public waiting times for elective surgery continue to blow out due to the COVID-19 backlog,” Ms Petterd said.
According to iSelect, the premium increase will cost the average family $123, couples $136 and individuals $59 extra a year.
Could you save on your health cover?
How to avoid paying the heath insurance premium increase
You can skip the increase by comparing insurance offerings from other health funds, locking in your premium at your current provider prior to April 1 2022 or by negotiating for a better deal with your health fund.
Shopping around for a better deal is a good place to start before speaking to your current insurer to help arm yourself with information and see if you could find a better price and a better policy.
“We’d encourage any customers struggling to afford their premiums to ‘switch not ditch’ and explore other options before cancelling as the savings can be well worth it and many customers are in fact able to find a similar level of cover for a lower price with a different fund,” Ms Petterd said.
“Now more than ever, a dollar saved is a dollar earned.”
And don’t forget, if you do decide to switch providers, you may be able to take any served waiting periods from an equivalent or lower level of hospital cover with you and might also be able to take advantage of any special offers for new customers.
If you’re really happy with your current health insurer, it’s worth asking whether they will allow you to pay 12 months upfront at your current rate to lock in 2021 prices.
Not all insurers allow you to lock in your premium, but it could be worthwhile if you can afford the upfront payment.
Just remember that the payment must be cleared by the bank before April 1, or even a few days earlier for some insurers.
Why does the price of health insurance go up?
Premiums increase each year to help cover the rising cost of health care (for example, medical staff wages, surgery, technology and devices), which is partly driven by factors such as Australia’s ageing population and inflation.
Will the price of private health insurance go up in 2022?
Private health insurance premiums will rise in 2022, kicking in on April 1 at an average rate of 2.70 per cent.
Some insurers are also expected to defer their premium rate rise to later in 2022.
What is the cheapest private health insurance?
Basic hospital policies with no extras are often the cheapest, although they provide minimal, if any, cover.
You may be able to still find an affordable option in Bronze or Bronze Plus cover that provides more value for money.
It’s important to get suitable health cover that suits your needs, taking into account more than just price when comparing health insurance policies.
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