By now, you may have heard about the changes about to come into place that will affect the cost of health insurance in Australia. An annual rise in premium rates will give health funds the ability to maintain a high level of benefits in the light of increasing cost pressures.
With the 1 April deadline looming, many people, individuals and business owners alike, will be looking into how it will affect their policies, and where they can save money on health insurance.
The upcoming event has inspired us to release our March newsletter detailing the changes, so our partners and customers are in the know about what's going on.
What is happening?
HICA's CEO, Suzanne Still, explained what is happening and why policyholders, or anyone considering purchasing private health insurance this year, should take note.
"The lead up to 1 April is an important time for health insurance consumers. It is at this time that the Federal Health Minister approves 2015 rates for all registered Australian health funds and announces an industry average increase and new rebate levels," Ms Still explained. "This is followed by health funds releasing specific rate increases and changes to policies and benefits.
"It is all very complex and confusing for the average consumer and time is of the essence with all changes effective 1 April."
How much have rates gone up by?
The average increase of premiums this year is 6.18 per cent, but this differs depending on health fund and the type of benefits in your policy.
The premium increase is the result of rising costs to health insurance providers. An ageing population, the growing affect of chronic diseases, higher utilisation rates and the advance of new medical technologies means the health industry needs to inflate costs to ensure it can continue to supply a high level of care.
Your health fund should write to you this month to provide you with the details of your new premium amount. If you haven't received the letter by late March or before your renewal period, you should contact your health insurance provider and find out how much your specific policy will rise by.
What about private health insurance premium rebates?
Depending on your level of income, Australians are entitled to a rebate for the premiums they pay for private health insurance.
The government adjusts these rates from the 1 April. The new rebate will be as follows for people under the age of 65:
- Base Tier – Individuals earning up to $90,000 and families bringing in up to $180,000 annually will be able to claim back 27.820 per cent of their premiums.
- Tier 1 – Single people earning between $90,001 to $105,000 ($180,001 to $210,000 for families) can reclaim 18.547 per cent of their health insurance bill.
- Tier 2 – Individuals whose annual wage is between $105,001 to $140,000 (families – $210,000 to $280,000) can get back 9.273 per cent of their premiums.
- Tier 3 – People who earn more than $140,001 and families above the $280,001 threshold are not eligible for the private health insurance rebate.
How do I calculate and claim the private health insurance rebate?
The Australian Taxation Office (ATO) has a range of tools for working out your exact entitlement and calculating your rebate.
If you are eligible for a rebate, you will receive a percentage of your health insurance cost back as either a reduced premium or a direct tax return. This is normally arranged when you apply for your health insurance cover.
If you need to change your nominated rebate level, you will need to contact your health fund.
If you should require any information regarding your entitlement to rebate, this can be attained through the ATO, which can be contacted by calling 13 28 61.
If your concerns are around health insurance, HICA has 30 years of experience providing free and educated advice. Contact our experts today on 1300 44 22 01.