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Unhealthy premium?

CHOICE says if you act now you can take the pain out of the health insurance price hike

27 February 2015

With health insurance premiums set to rise 6.2% on average this year consumers have 30 days to prepay the annual premium and avoid the price hike altogether.

“Your best option is to prepay now, and if you want to save even more, some funds give you a discount of up to a 4% for paying annually. This means that you can save up to 10% on average off your premium if you pay before the April 1 increase[1],” says CHOICE spokesperson Tom Godfrey.

This latest slug comes in the wake of last year's increase of 6.2% and a cumulative increase of about 35% since 2010. Recent CHOICE research also shows that health and medical costs are one of the top cost-of-living concerns for consumers[2]

“It’s also worth checking to see if your industry offers a restricted membership fund as their full-cover policies can be substantially cheaper than open funds. Families and former employees are also eligible.”

“The news gets worse for singles and families, who have been slowly losing value under the health insurance ‘30% rebate’. As the premium increase is above inflation, last year the rebate was only 29% and this year it will be even less for singles earning up to $90,000 and couples and families earning up to $180,000.”

“It’s important to ask yourself why you have private health insurance. Is it for tax purposes or planned hospital visits, emergencies or dental and optical expenses? Knowing what you want from your cover can save you a lot of money.”

“While some consumers switch to cheaper basic private insurance policies which allows them to avoid the Medicare levy surcharge and lifetime health cover surcharges, increasing the excess on a top cover policy can be better value as you save on the premium and will still be covered if you need to go to hospital.”

“If you are considering extras cover it’s worthwhile checking to ensure the benefits you receive are at least as much as the premium you pay, as some policies are pretty poor value.”

Health insurance saving tips:
  • Pay your annual premium before March 31 2015
  • Consider increasing your excess
  • Pay by direct debit 
  • Ask yourself if you really need extras cover
  • Check to see if you can join a restricted membership health fund
[1] http://www.choice.com.au/discounthealthinsurance
[2] CHOICE Consumer Pulse, December 2014, <https://www.choice.com.au/about-us/media-releases/2014/december/consumer-report-reveals-growing-economic-gloom>

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