Health insurance premium hikes: members consider cutting cover

The April 1 deadline for health cover cost increases is just days away, and members are being urged to check their cover.

Cost-of-living concerns have prompted one-third of Australians to consider cutting their private health insurance, but insurers are fighting back with a fresh range of incentives.

Ahead of the traditional April 1 rise in policy premiums, research commissioned by comparison website iSelect has found 33 per cent of people have considered downgrading or cancelling their cover.

However, this can be financially dangerous – and not just from a protection perspective. Higher income earners face a Medicare Levy Surcharge, while those aged over 31 can pay loadings if they do not have hospital cover, says iSelect spokeswoman Sophie Ryan.

Health funds are also offering sweeteners to attract new customers. “We’re seeing many funds currently offering cash back, weeks free, waiving waiting periods and other incentives,” Ryan says.

For example, Medibank private is offering four weeks free and gift cards, nib offers eight weeks free, and Bupa has offered up to 10 weeks free.

Other funds have delayed 2023 premium increases, averaging 2.9 per cent across all insurers, until later this year.

iSelect‘s Sophie Ryan says there are several ways to save. Picture: Supplied

“If your health fund is increasing prices on April 1, you’ve no time to waste. Get on the front foot now and compare your options before the price hike kicks in,” Ryan says.

She says consumers can save money by:

• Paying their premium upfront to delay the 2023 increase for another year.

• Regularly reviewing their policy details and price – “do not set and forget”.

• Consider increasing their excess or co-payment, which can lower premiums.

“Remember a delay isn’t a cancellation. While the delay may be welcome news for policy holders struggling with rising premiums and cost of living pressures, it’s only a short-term solution. The long-term solution is to find a better-value policy that will deliver you ongoing savings.”

The iSelect research also found almost half of Australians say they will cut back on other costs to avoid cutting their health insurance, while more than 40 per cent say they have not reviewed and compared their policy for more than a year.

Separate research by consumer group Choice has found Australians can save between $660 and $1360 a year by switching from the most expensive to cheapest Gold health insurance policy.

“If you’re a couple or a family, the savings are even greater,” says Choice health insurance specialist Uta Mihm.

“While the most significant savings available are for Gold policyholders, Silver policyholders can likely also find cheaper deals with the same coverage,” she says.

Mihm says people should compare policies at least once a year, call their current fund and ask for a better deal, and look beyond big well-known brands that often charge more.

Originally published as Health insurance premium hikes: members consider cutting cover