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Rise in health premiums at 20-year low, but there’s a catch
While the Australian government’s health insurance reforms have resulted in the lowest annual average premium change since 2001, according to experts consumers could still see a “whacking” premium increase soon.
Rise in health premiums at 20-year low, but there’s a catch
While the Australian government’s health insurance reforms have resulted in the lowest annual average premium change since 2001, according to experts consumers could still see a “whacking” premium increase soon.
The cost of health insurance will continue to beat inflation, with the average industry change from 1 April 2021 costing consumers 2.74 per cent more than last year.
This means the average single person will pay an extra $1.14 per week, while a family will pay $2.44 more a week, from 1 April 2021.
But Compare Club CEO Andrew Davis noted a six-month delay in health insurance premium rises due to COVID-19 restrictions.
“This means that within a period of six months, Australians who receive the average increase will have been hit with a combined increase of 5.66 per cent – eight times the rate of inflation,” Mr Davis said.
However, the CEO believes that some of the costs associated with rising premiums are justified.
“These include the increased cost and utilisation of services, and longer waiting times in the public system that drive more people towards private hospitals,” he said.
“For example, the cost of dealing with mental health is an area where we’ve seen a lot of change in terms of uptake and service delivery.”
Mr Davis has advised consumers who receive an increase greater than 5.66 per cent to shop around and find a better rate.
“Funds will let members know in the new year about exactly how much their policies are increasing, but for many it will exceed the national average,” he said.
“Tens of thousands of Australians will and should take the nudge of a whacking premium increase as a reminder that it is worth spending a small amount of time reviewing their cover with an expert.”
“On average, households who switch health insurance providers save $385 a year, which will offset the costs of premium increases. It’s a difficult time, but also one of opportunity for those who look to reduce their premiums and align their benefits to their current and future needs, not those of the past,” Mr Davis concluded.
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