Health insurance premiums are rising. On April 1, all health insurance rate rises will be finalised and just about every policy and product after that time will be charged at a new, higher price.
Last year, Australia's health insurers increased their premiums by between 3.98 and 7.92 per cent, with policyholders paying an average 6.18 per cent more than they did before April 2015. Some experts believe another 6 per cent rise is just around the corner; over the past five years, premium rises have been consistently around this level.
It makes sense to plan ahead for premium increases. They may be unavoidable, but there are ways for health insurance customers to maximise their budgets while, importantly, keeping the quality of their coverage high.
If you want to find a quality, cost-effective policy, we've come up with a pre-April 1 checklist to help you find the right level of cover, for you and your family.
Your health insurance checklist
1) Look at your family's needs – now and in the future
Are you in the market for a family health insurance policy, or one for couples or individuals? It might be an easy question to answer now, but do you expect any changes over the next year?
If you're trying for a baby, for instance, you may want to look at family health insurance with maternity cover instead of an individual or couples' policy. Knowing your future needs will help you plan for them before the April 1 deadline, meaning you can avoid any expensive change to your health cover after that date.
2) Consider your health
Pre-existing medical conditions can be a source of confusion among Australia's health insurance seekers. Remember, having a health problem is not a roadblock to insurance; though you do need to be aware that a pre-existing condition includes ones where signs or symptoms have occurred in the six months prior to joining a new policy. This includes undiagnosed conditions whether or not you have consulted a doctor. It is important to let your health insurer know of any conditions (even undiagnosed ones that you know about) that occur within six months prior to taking out a policy.
That means if you're buying or changing insurer before April 1 2016, you'll have to be aware of your own health and pass that information on. Not telling your insurer or broker of a pre-existing medical condition will likely leave you disappointed if you ever need to make a health insurance claim in the first 12 months or even later on.
3) Identify your level of cover
There can be quite the cost difference between everyday basic and comprehensive cover options – and you can imagine your access to benefits differ as well. Comprehensive cover can include hospital benefits like heart services, tonsil removal, and shoulder and knee reconstruction. The extras benefits are usually more extensive, too, including eye care and remedial massage, for instance.
By knowing your health needs (see step two) and balancing this with your budget, you will have a better idea of what you can afford and what benefits will best suit your circumstances.
— Lifehacker Australia (@LifehackerAU) November 23, 2015
4) Look into your rebate, surcharge and LHC
Your personal situation can also influence the cost of your health cover. Be sure to check your eligibility for the Medicare rebate and Medicare levy surcharge (both of these links contain more information). Based on your income, you may have to pay a little more to stay with Medicare, or you could get some tax money back by taking out appropriate private health cover.
Similarly, you may have to pay more if you take out your first health insurance policy after your 31st birthday. Lifetime health cover (LHC) is a 2 per cent premium loading for every year you wait to take out that first policy. If a person enters into a policy before July 1 following their 31st birthday, no loading applies.
Particularly with premiums rising, it's important to make sure you're getting as much help as you can before the April 1 deadline, and also not paying more than you need to.
5) Compare health insurance providers
Once you have a good idea of the type of coverage you need, it's time to check out which insurer suits you best – which offers a policy that satisfies both your health circumstances and your budget.
There are 34 health insurance providers in Australia, so this is no small task. However, spending a little time before April 1 and taking out an annual policy will secure the current rate for the coming 12 months.
Alternatively, get in touch with HICA. Health insurance can be complicated and time consuming, though no doubt important. Our independent professionals can help you identify what you need, create a budget, inform you of any rebates or surcharges that may apply, and compare health insurance options on your behalf. It's also a free service for individuals, couples and families.
If you need a helping hand, give us a call on 1300 44 22 01, and be sure to do so in good time to avoid the April 1 hustle and bustle.