Last Friday, the Australian Government announced the extent of the private health insurance premium rise. It was expected to be around 6 per cent – an amount many thought was on the high side.
The actual increase was announced as averaging 6.18 per cent, though varied between 3.98 and 6.99 per cent as different health insurers increase their premium rates at varying levels.
Health Minister Sussan Ley announced on Friday (February 27) that she had approved the rise, which sees health insurance prices grow above the rate of inflation – 2.2 per cent.
However, the increase still shows value for money for policyholders in many ways. On average, the amount paid out by health funds rose by 7.4 per cent in the December 2014 quarter from the previous three-month period, reaching a total of $17.28 billion.
Many policyholders will not want to leave the standard of care they receive through their private health plan, though will wish to cut the cost of it – especially before April 1, when the new rates come into play.
Your health insurance broker will be able to help you in this regard. Here are three ways they can work with you to reduce the costs of your premiums.
As Health Minister Ley explained as part of her speech: "With over 30 private health funds now operating in the Australian market, my strong advice to consumers is shop around to get the best deal".
Comparing health insurance should be a policyholder's first port of call. By changing provider, they can find significant savings for an identical (or perhaps even improved) level of cover.
While rates are still likely to be higher come April, experts suggest that people who make a switch could save as much as $1,500 on their private health insurance arrangements.
The only downside for policyholders will be, given the number of competing providers, finding the best deal can be time-consuming. This is where your health insurance broker can come in, using their networks to do the leg-work on your behalf.
Limiting your policy
Individuals, families and businesses who wish to see their premiums fall instead of rise next month will likely need to look at alternative ways to do so.
Limiting a health insurance policy is one way to do this. If your own, your family's or your corporate health policy includes a range of extras – such as dental, physiotherapy and eye care – though you feel comfortable living without such protection, they can be removed to create a more basic level of coverage.
This must be done carefully, though, ensuring that your resulting policy protects against some of the more pressing health concerns, so discuss ways to do so with your health insurance broker.
Looking into your health insurance rebate
If you are not receiving a rebate, you may be missing out on an effective way of receiving money back on your premiums.
The private health insurance rebate works on a means basis, entitling households on 'lower' incomes to money back from the government on their policies. This is either through a reduced premium or via a tax return from the Australian Tax Office.
The threshold is actually rather high, though. Individuals who earn up to $140,000 per year, and families that bring in $280,000 annually, can get a percentage of their premiums put back in their pockets – as much as 38.72 per cent.
The amount depends on your age and earnings, so if you have not looked into your entitlement recently, you may find that it has changed.
For help calculating and applying for this, or to chat about how your health insurance costs can be reduced, contact HICA today on 1300 44 22 01.