Private health insurance premiums are set to increase by an average of 2.74% on 1 April 2021, according to the Minister’s Department of Health. While this increase may be unsettling to some policyholders, it’s the lowest annual average premium difference since 2001.
This increase will have an impact on your monthly bill, but the value of having private health insurance outweighs the financial difference. Let’s take a closer look at the reasons for the increase, how it will directly impact you and your family members, reasons to continue your private health insurance plan and how HICA can be of assistance throughout April 2021 and beyond:
Why is there an increase?
Premium increases happen for a multitude of reasons. According to the Commonwealth Ombudsman, increases can occur when hospital and other medical and health-related costs are on the rise. If there’s an increase in use of health services, the amount paid by members must increase to compensate for the cost. It’s all about supply and demand. Wages for health care staff, medical equipment and costly procedures are a few of the factors that impact premium insurance increases.
The COVID-19 pandemic had an impact on the timing of the 2020 increase. The health insurance industry in a COVID19 support package for its members agreed to postpone the 1st April 2020 premium increases until 1st October 2020. Not only were increases delayed, but many private health insurers also initiated other measures that would ensure Australians still had access to the care they needed during the pandemic — even if they were facing job losses and other financial hardships.
Every year, the Australian Government provides $6.3 billion in a private health rebate to maintain the affordability of cover and keep citizens protected. Private health insurance contributes widely to keeping Australian families safe in an affordable and flexible way, and the insurance premium increase is put in place to ensure the financial stability of the insurers and resources are readily available to provide quality care as planned.
How does the increase impact me?
Private health insurance members will all feel the impact of the 2.74% increase but will notice different monetary amount changes based on their insurance provider. To get a better idea of how the premium increase will affect you personally, click here to better understand increases based on individual health insurers.
There, you’ll learn how the increases will impact your monthly bill based on your provider and gain a better understanding of where the funds are headed after the premium changes take place 1 April 2021. The premium increase amount varies from one provider to the next and premiums are also different based on where you’re located in Australia.
Do I need private health insurance?
Private health insurance is one of the most valuable options to protect your health and wellbeing as an Australian citizen. If you’re thinking about removing yourself from an existing policy based on the upcoming premium increase, consider the benefits that come with protecting you and your family members with a private health insurance plan:
More health cover. With a private health insurance policy, you get coverage for some or all of your treatment in both public and private hospitals and care facilities, with a doctor of your choosing, according to the Australian Government Department of Health. You also gain access to services that may not be provided under Medicare, such as physiotherapy, dental and optical care.
Reduced tax. Private hospital cover sometimes means you will not have to pay the Medicare Levy Surcharge.
Private health insurance rebate. With a private health insurance plan, you may be entitled to a rebate from the government so long as you have a policy that provides hospital cover, general treatment or both. Your income must meet the requirement to get the rebate, which will be awarded as lower insurance premiums by the insurer or a refund in your tax return.
Less expensive cover in the future. Lifetime Health Cover, an Australian Government initiative, provides the opportunity to avoid paying higher premiums in the future if you take out hospital cover before the 1st July following your 31st Birthday.
Remember, a private health insurance policy from one provider may be very unique in comparison to another. Policies at a higher cost are generally designed to provide more coverage over health care needs and services, while cheaper policies will likely cover less. This can help you decide what kind of insurance policy makes the most sense for you and your family based on the current state of your health and your immediate care needs.The Government has further assisted consumers to determine the quality of their cover by forcing insurers to label their hospital cover policies as Basic, Bronze, Silver or Gold with Gold being the highest level of hospital coverage.
How can HICA assist me during this transition?
Learning about changes to private health insurance premiums may have you feeling overwhelmed. Now’s a good time to reassess your current policy and decide if you still need all of the services within your plan. Instead of getting rid of your private health insurance altogether, you can explore your options and find a policy that works best for you and your family members.
If you’ve had significant life changes or you’re not feeling confident about your current health insurance plan, the team at HICA are prepared to assist and support. With our free health insurance review service, you can get a unique, no-obligation policy quote and recommendation based on a number of different Australian health insurance options.
We want to help find the most suitable and affordable option from our health fund range for you and your loved ones. Contact us today to learn more about your options.