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Health Insurance Premium Rate Rise 2019
As of 1 April 2019, private health insurance premiums have seen an average increase of 3.25% across the board. This rise will see a single person pay an average of $1.14 per week extra for their health insurance, while a family can expect an average increase of $2.35 per week.
On average, healthcare costs in Australia have been increasing at an average of 4.6% above inflation each year for the past 10 years1. According to Health Minister Greg Hunt, this year’s increase to private health premiums is the lowest since 20011.
So what does this mean for you? In this article, you’ll learn why annual increases in health insurance premiums occur, how to find out how much your premium has increased by, as well as other changes that came into effect this April.
Why is your health insurance premium going up?
Unlike other insurance products, such as car or home and contents insurance, all Australians are entitled to buy the same private health insurance products. This means that a health fund can’t refuse to insure you or sell you a policy on the basis of your health, or how likely you are to claim. There are also no increases to your premium based on your previous claim history.
This is because, unlike car insurance, private health cover is “community rated”, not “risk rated”. Community rating is a part of the legislation that governs health insurance in Australia, and is detailed in the Private Health Insurance Act 20072.
It means that even if you’re sick, injured or have a history of illness, you’ll still have the same access as everyone, even if it means you have to serve longer waiting periods before being able to claim on pre-existing conditions.
But health insurance providers still need to be able to keep up with the costs of providing health care. They can do this by getting approval from the Federal Government to increase the cost of their premiums each year for different products. As Australia currently has an aging population, more frequent and expensive admissions to hospital are occurring1, which has led to an average increase in the cost of private health insurance premiums by 3.25% this year.
Average health insurance premium increases since 2013
|Source: Department of Health4|
How much has your fund’s premiums increased?
The increase to health insurance premiums is not a blanket fee across the industry. Instead, how much your premiums increase depends on both your health fund provider, and the product you’ve purchased from them3.
If your premium has increased, you’ll receive a notification in writing from your provider, with your updated policy information, and details about the change3.
If your increase was higher than the average, your provider must be able to explain why this is necessary to cover the benefits included in your policy3. The explanation is typically because your particular policy was previously underpriced. If you’re unhappy with your price increase, it may be a good idea to shop around and see if you can find a policy that better meets your needs and budget.
What does the premium increase mean for you?
If you can no longer afford your health insurance premium, it’s worth looking at your options before cancelling your policy. Keep in mind, you may need to maintain hospital cover in order to preserve your Lifetime Health Cover status, and avoid the Medicare Levy Surcharge3.
Your current health insurer may be able to offer you cheaper alternatives to the policy you’re currently on, and which still meets your needs. Alternatively, you could shop around as other providers may have something more suitable for you.
Most insurers can offer cheaper options for hospital cover if you’re excess for your hospital admission. You could also consider reducing some of your extras cover.
Other health insurance changes coming into effect
The Australian government are releasing health insurance reforms that came into effect on 1 April 2019. These reforms intend to simplify health insurance and make it more affordable for the 13 million Australians currently covered by it1.
The reforms include:
Discounts for young Australians
If you are aged between 18 and 29, you may be eligible for discounts on your private health insurance premiums of up to 10%, depending on your age and policy.
Learn more about private health discounts for young Australians here.
Improved mental health benefits
Mental health reforms are designed to improve patient access to mental health services and encourage more people to seek help.
Learn more about the mental health reforms here.
New private health insurance tiers
By introducing a new four-tiered system for all private health products – Gold, Silver, Bronze and Basic – members will have a clearer understanding of what’s included in their policy.
Learn more about the health insurance tiers here.
Increased regional support
These reforms mean regional patients with private health may be covered for travel and accommodation costs if they stay in hospital for a medical procedure.
Learn more about the regional benefits here.
Compare health insurance providers with iSelect
If you’re ready to start reviewing your health insurance options, we’ve partnered with a variety of providers who may have the ideal product for you.
We don’t compare all health insurance providers or policies in the market. The availability of policies will change from time to time. Not all policies available from our partners are compared by iSelect and due to commercial arrangements, your stated needs and circumstances, not all policies compared by iSelect will be available to all customers. Some policies are available only from our call centre and others are available only from our website. Click here to our range of providers.