Need to know
- Due to the COVID-19 crisis, most health funds have deferred their premium increases for at least six months.
- Bupa, Medibank, HCF and NIB and will increase premiums on 1 October. HBF has cancelled its 2020 price hike entirely.
- Premiums were due to increase by 2.92% on average on 1 April.
The lowest health insurance premium increase in nearly two decades has been deferred until October, as insurers delay their annual price hikes until after the peak of the coronavirus epidemic.
The price freeze comes after most elective surgeries were cancelled and many extras providers were forced to stop providing clinical care, due to necessary social distancing rules.
With insurers facing a massive drop in claims payouts, it became untenable for them to increase prices for customers largely unable to use their insurance.
Average premiums were set to increase by 2.92% on 1 April, though some funds were to have increases as high as 5.6%. In most cases, these increases will now come into effect on 1 October.
Customers will continue to pay their 2019 premiums until then.
Rebate frozen for 12 months
The annual decrease to the government's private health insurance rebate has also been cancelled for 2020.
Under 65s on the base income tier will continue to have 25.06% of their premiums covered by the government.
Older customers and wealthy households will receive different rebate amounts.
The rebate was set to reduce to 24.8% on 1 April. The amount of the reduction is determined by how much premiums increase compared to the rate of inflation: the bigger the difference, the more the rebate goes down.
In most years premiums go up by two to three times the rate of inflation, but the price hike delay has led the government to recalculate the adjustment.