As private health insurance premiums rise, is it worth making the switch?

The cost of health insurance is set to rise on April 1 2023 for 8 funds across Australia, adding more pressure to the already eye-watering cost of living crisis which is only compounded by inflation.

According to market comparison website Finder, the 8 funds cover approximately 1 in 10 health insurance customers.

With an average 2.9% rise in premiums and rebate percentages adjusted each year at the start of April, it’s important to remember that private health insurance is a dynamic market.

Those eligible for a rebate can claim their income-based entitlement through their provider or through lodging their tax return as a refundable offset, if coverage includes private patient hospital cover, general cover (extras) or combined hospital and general cover.

As policies change and some providers offer lower premiums or deductibles that you may not have had the chance to check out, it pays to remain savvy and review which levels of coverage reflect your needs.

Medibank (including AHM), Bupa, NIB (including Qantas Health) and HCF (including RT Health) will delay their price hike until later in the year, but the option to pre-pay a 12-month insurance policy, before the increase, may be a viable option depending on your savings and the terms of each provider.

“Private health insurers must ensure their members are getting value for their money and when costs rise, they want to know higher premiums are contributing to system-wide improvements, like higher wages for nurses and other health workers,” said Mark Butler, Minister for Health and Aged Care.

Along with the private health insurance rebates and Lifetime Health Cover loading (in order to encourage insurance for youth and older Australians), the government reform program intends to improve the Medical Costs Finder, which is intended to demonstrate clear value in healthcare coverage.

Bundling policies should also be considered and reviewed by those paying for private health insurance, as extended coverage for children may not make sense for someone without dependents, but on the other hand, you may be able to pay less for bundled coverage (i.e., home, car and contents).

One may wish to consider a higher excess at the start, along with taking advantage of preventative care services which may be included in your policy, as each are strategic ways to stay one step ahead of rising costs.

Through paying a higher excess, you may be able to pay a lower periodic premium and through regular check-ups with your general practitioner (GP), along with staying up to date with immunisations, you may be able to avoid paying for costly healthcare services in the future.

Additionally, the National Disability Insurance Scheme (NDIS) can provide support and services for ongoing disability coverage, which can ensure a greater quality of life and care in the long-term.

New findings from iSelect report that 1 in 3 Australians have considered cutting down on health insurance or just pulling the plug and cancelling their coverage entirely.

However, by writing down a list of what you need out of a policy, reviewing those priorities annually and then adjusting your insurance to suit your budget — you can have peace of mind, in health and in wealth.

For more information about the financial management of your health, please visit the Disability Support Guide information portal.