According to the Department of Health at the time of writing, the industry average rate rise for private health insurance for 2020 will be 2.92 per cent.
Sure, this may be the lowest average increase in nearly two decades and down from the 2019 average of 3.25 per cent.
However, depending on your specific health fund, the actual October rate rise could be higher or lower than 2.92 per cent.
As it stands, the highest fund average rate rise for 2020 is 5.63 per cent, while the lowest is 0 per cent.
Some health funds, such as HBF and TUH, have opted to freeze premium increases until at least April 2021.
Others, such as Bupa and nib, will not pass on the increase to anyone currently receiving JobSeeker and JobKeeper payments.
While the average increases were calculated based on scheduled premium changes in April 2020, most health funds deferred their rate rises until 1 October 2020 due to COVID-19.
So, the exact increase you could face depends on your health fund and policy. If it hasn’t already, your insurer will let you know about any change in your insurance premium by letter, email or SMS.
YourLifeChoices asked its members whether they had received their increase advice. Some had and were unhappy about it.
“Sure have. I am with Westfund and was informed my price is increasing by nearly $100 per year. I would be happy if it was 3 per cent, mine is 8 per cent. I don’t want to pay more and need to find a better deal somewhere else,” wrote Matthew.
“Yes, I’m with CUA couple membership, just been told it’s increased by $240! After being with them for 30 years too! No preferential rates for being loyal! Hopeless! Time to move, I think …” wrote Jem.
Other members are happy with their health funds.
“Have been with Phoenix (Newcastle NSW) for some 18 months and cannot find fault. Premium increase is only 1.7 per cent from 1st October. Of note, I did enjoy receiving a phone call from Phoenix some time ago just to see how I was going and how I was coping with lockdown in Melbourne during this pandemic. No selling, just a call to see all was okay, and how good is that?” wrote Phoenix.
If you haven’t received notice of your rate rise, this rate rise calculator can help you find out how much extra you’ll pay.
Every year, the government approves a rate increase for health insurance premiums to account for the rising cost of healthcare in Australia. There are a few factors contributing to this:
- More people are accessing more health services each year.
- An ageing population and increasing rates of chronic disease are placing a bigger demand on health services.
- Medical advances are often more effective but also more costly.
- This means paying benefits is getting more expensive for health funds each year. Most health funds pass some of these additional costs on to customers in the form of yearly premium increases.
While the rate rise, in theory, allows health funds to continue to be competitive, cover you for more services and provide more benefits, it can have a serious impact on people’s finances.
Comparing health insurance can help you find a similar policy for a lower price, depending on your health fund, your current policy and the amount your premiums will increase.
If your health fund has notified you that your premiums are about to increase, here’s what you can do:
Crunch the numbers
Calculate how much your premium increase is going to cost you over the course of a year. It’s good to know this when comparing policies and premiums.
Review your cover
While your premiums are going up, your level of cover could stay the same or even decrease. If you’re going to be paying more for less cover, it could be time to look for a better-value policy.
Check if you can lock in a premium rate
If you’re happy with your current policy, you might be able to avoid or at least delay the increase by paying your premiums in advance. Check with your health fund to see if they offer rate protection.
Shop around
Knowledge is power when it comes to finding a better health insurance policy for your circumstances. Use a health insurance comparison tool to see what options are out there.
Talk to an expert
Getting your head wrapped around all the options out there can be tricky. Talk to one of our health insurance specialists – our goal is to find you the right policy.
The great news is the power is in your hands when it comes to choosing health insurance. There are a few things you can do to potentially get better value for money on your health insurance:
Bundle your insurance
If you’re happy with your current health fund, you might be able to save by bundling policies or choosing a policy that covers the whole family.
Shop around for a better deal
Comparing options from different health funds can help you find better value for money on a policy that suits your circumstances. Compare health insurance quotes for free or talk to one of our health insurance specialists for help in finding the right policy.
Consider switching policies
You aren’t locked in to one health insurance policy forever. Generally, you can switch at any time without incurring additional charges. If your health fund is raising premiums this year and/or decreasing your cover, it may be worth moving to a new policy.
Have you received your rate rise notice? How much extra will you pay?
YourLifeChoices is owned by Compare Club Australia. This article used edited information originally published as Private health insurance calculator.
Correction 24/09/20: THU changed to TUH.
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Related articles:
https://www.yourlifechoices.com.au/finance/news/health-insurance-cop-fires-blanks
https://www.yourlifechoices.com.au/finance/insurance/why-review-your-health-cover
https://www.yourlifechoices.com.au/health/covid19/health-insurers-to-the-rescue
