Every year on April 1, health funds raise their premiums. They do this to combat their own growing costs that occur thanks to inflation, an increased healthcare burden and the costs of new, modern medical equipment.
In March, the 2016 figure was released. Health insurance premiums will rise by an average 5.59 per cent on April 1, 2016.
Last year brought median increases of 6.18 per cent, so there is indeed a slowdown in the rate we're seeing premiums rise by. It is also less than the 10 per cent rise some were predicting back in 2015.
Why has it risen by this amount, what does the government have to say and, most importantly, what does this mean for you?
Health insurance premiums will rise by an average 5.59 per cent on April 1, 2016.
How has this figure come about?
Health Minister Sussan Ley recently asked health insurers to lower their premium-rise projections or justify the increase, leading 20 health funds to resubmit their application for premium pricing. According to the Guardian, some insurers returned 1.5 per cent lower than what was previously submitted, reducing the costs for more than 93 per cent of policyholders.
"Consumers will be $125 million better off as a direct result of our request for insurers to resubmit lower premiums," Ms Ley said.
But is it enough? Trading Economics logs the rate of inflation at the 1.5 to 1.7 per cent mark so far in 2016, putting the 5.59 per cent rate far above that. Subsequently, some analysts have been vocal about whether it is fair, and even supportive of our wider healthcare system.
"Many are having to think of dropping it or reducing their cover."
What does this mean?
Any rise makes people think twice about having health cover. Affordability is a constant issue, and has led to people putting their healthcare benefits at risk by chopping important parts of their policies.
Online newspaper news.com.au says the increase in health insurance premiums puts it above the cost of petrol for some policyholders. With the recent drop in oil prices, the two outgoings have met somewhere in the middle. Other parties have been similarly disgruntled by the price upgrade.
"This latest rise is about three times the rate of inflation in the last year," explained Consumers Health Forum's spokesperson Mark Metherell in a report by SBS News. "So it is making it harder for people to keep insurance. Many are having to think of dropping it or reducing their cover."
"It is very hard for the consumer really to get an apples-with-apples-type comparison."
What can you do?
In anticipation for a premium increase, we've recently touched upon a number of ways to save money on your health insurance. Mr Metherell says having a better way to compare insurers is going to be important for reducing costs. However, that's difficult for many to achieve on their own.
"There's so many different levels of cover, restrictions, exclusions. So it is very hard for the consumer really to get an apples-with-apples-type comparison. And that's what we are arguing for," Mr Metherell continued. "That there should be some sort of standardised platform for consumers to easily compare one health fund policy with another."
If you need to speak about your options, and compare health insurance products and providers, HICA can help. We're specialists at leveraging our expertise to help individuals, families and businesses find the health insurance they need.
Before you put your healthcare benefits at risk, call our team on 1300 44 22 01 for an honest and open chat. Our services are free to individuals, couples and families.