Private health insurance is going up – again!
Some fund premiums have just gone up. Others will follow. How much more will we have to pay?
Many private health insurance providers put up their premiums on 1 June. That’s bad news for almost four million Australians who are already seeing price rises and living expenses rise across the board.
About 45% of Australians have private hospital cover and more than half of those people have private extras cover, according to the latest data from Australian Prudential Regulation Authority (APRA).
One 1 June, the nation’s biggest health insurer, Medibank, and its subsidiary AHM lifted premiums by an average 2.96%.
“The increase is less than the current annual rate of inflation, which is 7%,” The Australian reported recently. “It’s the second rise this year for Medibank, which also moved on January 16, but it is the result of the fund delaying premium rises during the pandemic.”
Health Minister Mark Butler approved premium increases in early February.
Health funds, which made a combined profit of $1.2 billion last year, were allowed to increase fees from 1 April but many delayed the move as part of their commitment not to profit from COVID-19.
It is expected insurers will return to traditional 1 April annual increases from 2024.
Reasons to take up private health insurance include peace of mind, greater choice of healthcare providers and reduced waiting times for elective surgery, which is particularly attractive to older people.
“For surgeries, you can be waiting up to a year in the public system — compared to weeks or months in the private system," CHOICE health insurance specialist Uta Mihm told ABC News.
Financial reasons for people on higher incomes include minimising the Medicare Levy, which is imposed on an increasing scale according to income.
The federal government offers a private health insurance rebate, which is income-tested and can be claimed directly from your provider or as a tax offset.
In other words, people may purchase health insurance for tax relief rather than evaluating the value of the product itself.
On one hand, seniors tend to get more from private health insurance than other people because they have a higher risk of needing surgery.
On the other hand, seniors often pay for more “extras” than they need. However, you should check your personal level of risk before considering cutting back.
It surprises many seniors that private health insurance does not guarantee cover for the total cost of treatment or surgery.
Not all surgeries are covered by private health insurance and, even if a surgery is covered, you may still have to pay a gap fee or an out-of-pocket cost. Specialists can charge what they want, so these costs can be difficult to determine. Speak to your specialist and shop around if you’re dissatisfied.
It’s advisable to review details of your policy to know what your potential out-of-pocket expenses may be. Read the fine print when it comes to accident cover because there are strict conditions.
If you haven’t sought treatment straight away, you may not be covered, and if you need treatment over a longer period, you may only be covered for the initial treatment.
Footnote: Our health insurance system needs urgent reform. National Seniors is campaigning to reduce private health costs, including adequate funding for Medicare services and transparency in specialist fees. Read about our campaign here.
Related reading: The Australian, ABC
