- Private health insurance premiums rising on April 1
- Increase of 3.73 per cent is the biggest since 2018
Finance expert David Koch has warned 14million Australians about the biggest increase in private health premiums in seven years.
The Department of Health has approved a 3.73 per cent average increase in premiums, coming into effect on April 1.
The biggest annual increase since 2018 would conservatively amount to an extra $30 a year for a single individual, or more than $100 a year for a family paying for dental and basic hospital cover.
When it comes to family budgets, this latest increase would cancel out relief from the Reserve Bank’s latest rate cut for a borrower with an average $600,000 mortgage.
Health costs in general are already increasing at a pace that’s higher than the overall inflation level.
Koch, former host of Sunrise who is now Compare the Market’s economic director, said some Australians with higher levels of cover could be paying hundreds of dollars more a year in private health insurance.
‘It’s no surprise that these premium increases have been on the horizon, given we usually see health funds adjust their premiums every year on 1 April,’ he said.
‘However, this doesn’t mean it’s not going to impact the more than 14 million Australians who currently have some type of health insurance.’
Finance expert David Koch warns 14million Australians are going to feel the effects of the biggest increase in private health premiums in seven years
He suggested switching health funds if premiums went up by more than the 3.73 per cent average increase.
‘If your individual policy is increasing by more than 3.73 per cent, it may be time to look elsewhere,’ he said.
Koch suggested Australians reconsider their private health insurance policy if it had extras they didn’t need.
‘For example, you may hold a Gold hospital policy which is the most comprehensive level of cover, but switching to a Silver Plus or Silver policy may still cover you for all the inclusions you need, without paying a premium for things you may never need to claim on,’ he said.
‘A common one I see is people paying for extras on their policy that they don’t even use.
‘You may be able to switch to a policy that offers fewer services, but it could be more bang for your buck if you are utilising the extras that are included.’
Health Minister Mark Butler said he had asked Australia’s 29 private health insurers to resubmit their hike proposals three times to arrive at the 3.73 per cent increase.
‘It is my responsibility as Health Minister to ensure that any private health insurance premium increase is justified and proportionate,’ he said.
The Department of Health has approved a 3.73 per cent average increase in premiums to come into effect on April 1
‘Based on the resubmissions, I was not prepared to tick and flick their asks and instead asked them to resubmit again.’
The announcement was made as new monthly inflation data for January showed general health costs had increased by 4 per cent during the past year, which was much higher than the overall 2.5 per cent consumer price index.
Australians who don’t have private health insurance have to pay a higher Medicare Levy surcharge.
But Koch said going without private health insurance means a long wait in the public system for elective surgery.
‘With public waitlists for elective surgery remaining long and the cost of out-of-hospital treatments rising, ditching cover altogether may not be the best idea – especially when there could be a similar policy available with a smaller price tag,’ he said.
