Health insurance premiums will rise 2.9 per cent on April 1. Tamika Seeto* outlines how insurance holder can save.
Aussie families will pay an extra $134 per year for health insurance, while singles will be slugged with an additional $60 per year.
Health insurance premiums will increase by 2.9 per cent, on average, on April 1, with the three biggest health funds applying even bigger hikes.
Medibank (which includes ahm) will increase premiums by 2.96 per cent, while Bupa will increase premiums by 3.39 per cent and HCF by 3.33 per cent.
Medibank has delayed its premium increases to June, while Bupa will postpone until July.
Nib – which is increasing premiums by 2.72 per cent – will also delay increases until September.
iSelect spokesperson Sophie Ryan said the premium hikes would be a tough pill to swallow for the 14.4 million Aussies with private health insurance.
“Millions of Aussies were only just stung with a private health increase on 1 November, 2022, following the decision by Bupa, HCF and nib to postpone their 2022 increase from April to November,” Ryan said.
“Combine this with other cost-of-living hikes, such as interest rates, groceries and fuel, and it’s understandable families may be wondering how they’re going to manage in the year ahead.”
Joel Gibson, author of Kill Bills, said the increase could be the “straw that breaks the camel’s back” for some households.
“2.9 per cent is a pretty good result, but it’s on top of a very large bill that’s gone up over the last decade,” Gibson said.
“If you had a $2,000 policy in the days when Kevin Rudd was prime minister, it would now cost more than double that.”
Five ways to save on health insurance
Aussies could potentially save hundreds of dollars by switching or tweaking their health insurance cover, Gibson said.
Here’s how.
- Check your cover
Firstly, check your cover and make sure you aren’t paying for things you don’t need.
“We’ve now got Gold, Silver and Bronze categories for health insurance, which makes it really easy to work out which level of cover you actually need.
“If you are over-insured, you can drop down from Gold to Silver or Silver to Bronze and save hundreds of dollars that way,” Gibson said.
- Increase your excess
If you don’t think you are going to make a lot of claims this year, you could also consider increasing your excess.
“You can increase your excess to as much as $1,500 for a couple or family.
“Increasing it to the maximum can also bring your premium down by a couple of hundred dollars,” Gibson said.
- Look at your extras
Unlike hospital policies, extras are irrelevant to tax.
So, Gibson said, you only want to be paying for extras you are using.
“Extras are those out-of-hospital, allied-health services, things like dentists, physios, optometrists and orthodontists.
“You can easily see if you are getting value for money by checking what you have claimed in the past year or two and comparing it to the cost of the policy,” Gibson said.
- Switch policies
It’s also worth shopping around and seeing what else is on offer.
Health funds often offer sign-up incentives, such as up to eight weeks free or up to $800 cashback for new members.
“The incentives for switching have never been as big as they are now, so it’s definitely worth cashing in on if you are looking for a way to save,” Gibson said.
- Pay annually
Lastly, you could save by paying your premiums annually before April, rather than paying monthly.
“If you pay annually before the premium increase happens, you can lock in the current price for a year and defer that price rise for up to a year,” Gibson said.
*Tamika Seeto is a journalist at Yahoo Finance Australia covering personal finance, work and careers amongst other topics.
This article first appeared at au.finance.yahoo.com.
