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Insurers continue to inflict premium pain

CHOICE says Australians are staring down a 70% private health insurance price hike since 2008

25 January 2018

CHOICE is warning private health insurance customers that they're facing a staggering 70% increase on premiums since 2008, following confirmation that premiums will rise by an average of 3.95% from April.

"Australians are set to be hit by an increase that's twice the rate of inflation, with... people on couples or family policies spending around $160 more a year on hospital cover," says CHOICE Head of Media Tom Godfrey.

The average cost of a single-person top hospital policy will increase from $2020 to $2100 before the rebate discount[1].

"With the new price rise everyone should be asking, 'Do I need health insurance?' Especially if you're aged under 31 years old, earning less than $90,000 per year and are otherwise fit and well," says Mr Godfrey.

"Notwithstanding the barrage of fear-laden advertising from health insurers and for-profit switching sites, private cover is unaffordable and often unnecessary for many consumers."

If you're struggling with the cost of private health insurance it's worth taking CHOICE's free quiz to cut through some of this complexity and marketing spin.

"Knowing what you want from your cover can save you a lot of money," says Mr Godfrey.

"Do you have cover for tax purposes or planned hospital visits, emergencies or planned dental and optical expenses?

"If you have an existing policy, it will pay to get your insurer on the phone before April 1 and ask them what your actual price increase will be. The chances are you'll be paying a lot more than the 3.95% average.

"If you decide to stay in the private system, resist the temptation to be dropped into a poor value junk policy which excludes the vast majority of treatments you might need.  

"Staying with a top level cover policy and increasing your excess to reduce your premium could be a better option, and looking for a health fund which offers discounts for paying by direct debit is worthwhile.

"It's also possible to beat the annual hike by avoiding combined policies and taking out hospital and extras cover with different insurers.

If you have some cash on hand, pre-paying your annual premium before April 1 will delay the premium pain until next year.

"When it comes to extras cover, ask your insurer for your annual claim statement to see if you're paying more in premiums that you're getting back in benefits," says Mr Godfrey.

"If you're not getting value from your extras policy, dropping it could save you hundreds of dollars a year on your health insurance premium."

Health insurance saving tips

  • Consider increasing your excess to reduce your premium.
  • See if your health fund offers discounts for paying by direct debit.
  • Ask yourself if you really need extras cover: if the amount you claim is lower than your premium, consider dropping it.
  • Check to see if you can join a restricted membership health fund.
  • Pay your annual premium in March to put off the April 1 price hike until next year.
  • Do I Need Health Insurance? Take the quiz to see if there's any tax benefit to paying for hospital cover.
  • Consider avoiding combined policies and taking out hospital and extras cover with different insurers.

Media Inquiries

Tom Godfrey, CHOICE Head of Media and Spokesperson – 0430 172 669 – @choice_news