Health insurance price increases are around the corner. For some, bills have already gone up since April 1.
The premium increases are nothing new. In fact, each health insurer increases the cost of its cover annually. Premium increases will go up on average by 2.9 per cent in 2023, a slight rise on last year’s hike of 2.7 per cent.
To lock in cheaper premiums, there are a few things you can do.
You could switch to a fund that’s postponing the price increase. Like last year, a handful of major providers are delaying their hikes once again due to savings made during COVID-19.
Those delaying in 2023 include Bupa, Medibank, AIA, HCF, hbf and nib.
If you can find better bang for your buck, the switching process is simple. Your new fund takes care of things and will cancel your old policy for you.
Pay up front
Another option is to pay a year – or more – of your health insurance in advance. Many funds offer this, including the six listed above.
For example, HCF lets you lock in at today’s rate for 18 months. It’s delaying its 3.33 per cent price increase until September 1. That means you could get 2022 prices until March 2025. This translates to a saving of up to $134 by prepaying, depending on the policy you have.
Review your existing cover
A recent Findery survey found 10 per cent of Australians had dropped or reduced their insurance coverage as cost-of-living pressures intensified.
Cancelling your private health cover can be a risky move, especially if you have a health scare in the future. If you’re struggling with premium increases, better than ditching your insurance altogether would be to drop down to a lower tier of coverage. For example, from gold to silver, or bronze to basic.
You could also choose a higher policy excess to get a lower premium. Your excess is what you need to pay up front at the hospital when making a claim. Singles can opt for an excess of up to $750, while couples can go as high as $1,500. Most funds waive the excess for kids being treated in hospital as a carrot for taking out family cover.
Ask yourself: ‘Do I really need extras?’
Extras cover helps with the cost of non-hospital treatments, such as dental, optical and physio. The fact that extras come with cover limits that reset each year – in January or July, depending on which fund you’re with – means a lot of people rush to claim their benefits or lose them altogether come the year’s end.
So, check if your extras are giving you value for money. If you’re not getting more in benefits than you’re paying towards your policy, there’s little to no tangible value in having it.
As author and finance expert Glen James recently put it to me:
“Any extra benefits are that only – extras. Focus on the quality of the hospital cover, because the real benefit of private health is elective surgery – to skip any public waitlists – and care.”
Shop around for better value
The health insurance market is very competitive. A lot of funds offer discounts and sign-up bonuses. For example, you could get as much as eight weeks free as a new customer (as long as you pass certain cover periods set by the fund).
With premiums about to go up, now is a great time to compare policies, especially if you think your insurance isn’t offering you value for money.