Could you save before private health insurance premiums rise on 1 October?

For many Australians, the holiday from paying higher health insurance premiums is about to end. It’s not too late to save money on health insurance though, one expert explains.
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Most health insurers are increasing premiums from 1 October, 2020. Image source: Christopher Meder, Shutterstock.

Many health insurers postponed increasing premiums in April this year for a period of six months, to provide immediate budget relief to Australians during a time of uncertainty.

That six-month clock is about to strike on 1 October, with most health insurers set to hike premiums then.

There may be an ‘out’ for policyholders on JobKeeper or JobSeeker, with some funds opting to delay or discount your increase if you can provide evidence of receiving either support payment, and if you meet the insurer’s eligibility requirements.

Bupa, for instance, is delaying premium hikes until April, 2021 if you or your partner have received JobKeeper or JobSeeker payments. Medibank is discounting premiums by 50% for six months for eligible customers on the payments and HCF says it will cover your health insurance premiums for up to six months “if you’ve become unemployed or stood down through no fault of your own”.

There’s also a range of other financial hardship assistance available from health insurers, with the relief available often depending on individual circumstances.

If you’re not unemployed but you’ve received a letter from your health fund notifying you of an upcoming premium increase, it could be a good time to pick up the phone and talk to your insurer.

If they can’t help and you feel you’re not on the best policy for your needs anymore, there could be a better deal out there.

↓ Keep reading to see which health funds are hiking premiums on 1 October

How to save money on health insurance

Canstar money expert Effie Zahos said it’s important that consumers become active with their health insurance fund between now and October and consider ways they can save. Here are her top tips:

Check if you’re eligible for a premium pause or discount

First of all, check with your insurer what financial assistance may be available to you and if you’re eligible for a premium pause or discount due to receiving JobKeeper or JobSeeker.

And remember, the pause is a temporary relief measure.

“The thing we’ve got to be mindful of is if your insurer postpones your increases, that may mean you’ll get a double hit in April next year so we might be just pushing out the problem,” Ms Zahos said.

“It is really important that we do take a good look at our insurance policies now.”

Check to see if your rebate has gone up

Ms Zahos said if your income has dropped over this period, your rebate may have gone up, meaning you might not be paying as much as you think.

The private health insurance rebate is a government initiative that aims to help make private health more affordable, saving eligible Australians up to around 33% off their premiums. It’s income-tested, meaning your rebate entitlement goes up when your income decreases. It’s also based on your age and whether you’re single or have your own family.

Generally speaking, the older you are and the less you earn, the higher your rebate will be. Rebates were due to decrease in April this year but have instead been left on hold until 2021, in light of the pandemic.

Consider pre-paying your health insurance premium

One option to save on rising premiums could be to pay ahead as a lump sum before October, possibly allowing you to lock in at a lower price, Ms Zahos said.

Earlier this year, Canstar’s research analysts found pre-paying 12 months worth of premiums could earn you a discount of up to 4%, but the feature was only available from a few health funds.

If you can afford to pay in advance, it could be worth making the call to your insurer to see if this is possible and whether it could save you money.

Check if you’re making the most of your extras

Another simple way to save on health insurance is to check if you’re getting the most from your extras. According to the numbers, many of us aren’t.

APRA’s quarterly private health statistics for the three months to June, 2020 showed the average annual cost of extras cover for a single person was $713 but the average benefits paid totalled just $434.

“Clearly, this shows people aren’t maximising their extras benefits. Know what you’re entitled to and use them,” Ms Zahos said.

“In some cases you can split your extras cover and hospital cover, which may get you a bit of premium relief.

“Take a look at your extras usage and see what you’ve claimed and how much you have remaining to claim, as you may be able to claw back some of a premium increase in your extras benefits.

“If you’re not using your extras cover, then consider if you really need it.”

Ms Zahos said she believed hospital cover was important to help prepare yourself for the unexpected.

Which health insurers are increasing premiums on 1 October?

Canstar’s research analysts put together a snapshot of what some health insurers on our database are doing with customers’ premiums from 1 October, 2020. Here are the details:

ahm

ahm premiums will go up by 3.27% (the same as parent company Medibank) on 1 October, after premium increases were postponed in April. Financial support options available to eligible members impacted by the COVID-19 pandemic include:

  • Financial Hardship Policy Suspension: suspend your policy for up to three months
  • Partial Premium Assistance: 50% reduction of your premium for six months
  • Two weeks free: two weeks of premium relief applied from 2 October for members residing in an area where a State of Disaster has been declared

For more information and details of eligibility criteria and how to apply, go to ahm’s website.

Australian Unity

Australian Unity’s premiums will go up by an average of 2.79% from 1 October, after the hikes were postponed in April.

JobSeeker and JobKeeper recipients can apply to have their premium increases deferred until 1 April, 2021.

For more information and details of eligibility criteria, go to Australian Unity’s website.

Bupa

Bupa’s premiums will rise by an average of 3.26% from 1 October after the increase was paused in April. There a few options available to members, including:

  • Your premium increase could be paused until 1 April, 2021 if you (or your partner) are eligible to receive the JobSeeker or JobKeeper payment.
  • You can apply to suspend your policy for three months if you are experiencing hardship as a result of COVID-19. Bupa says you won’t need to pay premiums for three months, but no claims will be payable for services on your policy during that time.

For more information and details of eligibility criteria and how to apply, go to Bupa’s website.

CBHS

CBHS postponed its scheduled average premium increase of 3.91% until 30 September, 2020.

Members experiencing financial hardship because of COVID-19 will be able to access up to six months’ free cover on a Hospital or Hospital & Extras policies, and cover can be suspended following this for three to 24 months. CBHS notes that you will not have to pay premiums while your policy is suspended, but it will not cover claims during this period.

For more information and details of eligibility criteria and how to apply, go to CBHS’ website.

Frank Health Insurance and GMHBA

Frank Health Insurance and parent company GMHBA’s premiums will increase on 1 October by an average of 3.34%. A few relief options are available to members, including:

  • Premium reduction of 30% for three months if you are accessing JobKeeper or JobSeeker
  • Membership suspension, with the ability to reactivate your cover at any time you need

For more information and details of eligibility criteria and how to apply for relief, go to Frank Health Insurance and GMBHA’s websites.

HBF

HBF cancelled this year’s scheduled premium increase of 1.98% altogether, meaning customers’ premiums aren’t set to rise again until 1 April, 2021. The fund also offers a few hardship assistance options, including:

  • Suspend your policy for up to 15 months if you’re receiving JobSeeker and have been a member for more than one year, or for up to six months if you’ve been a member for more than one month and aren’t receiving JobSeeker.
  • Up to nine months of complimentary cover available, depending on the length of your membership. Members need to be receiving JobSeeker and to have been a member for more than three years.
  • Suspend your policy for up to six months if you’ve been a member for more than one month.
  • Temporarily allowing members to use their Gap Saver accrued entitlements to pay their premiums.

For more information and details of eligibility criteria, go to HBF’s website.

HCF

HCF’s health insurance premiums will go up from 6 October by an average of 3.75%.

If you were a member before 31 March, have hospital only or hospital & extras cover and have become unemployed through no fault of your own, HCF says it will pay your premiums for up to six months and you’ll still be covered during that time.

For more information and details of eligibility criteria, go to HCF’s website.

Medibank

Medibank’s premium pause will end on 1 October, with prices set to rise by an average of 3.27%. The fund has a few financial assistance options available, including:

  • A 10% reduction in premium for three months from 1 October will be available to those who are living in a declared state of disaster and are suffering financially due to COVID-19.
  • 50% reduction in premium for six months will be available for members who are receiving an eligible government support payment due to COVID-19.

For more information and details of eligibility criteria, go to Medibank’s website.

nib

nib’s premiums will increase from 1 October by an average of 2.90%, but there are a few options available to members:

  • If you are receiving JobKeeper or JobSeeker, you can apply for a 60-day premium waiver or a financial hardship suspension for up to six months.
  • If you have been financially impacted by COVID-19 (but aren’t receiving JobKeeper or JobSeeker) you can apply for a 30-day premium waiver or a financial hardship suspension for up to three months.
  • No premium increases to Extras-only cover this year, and Hospital cover premium increases postponed to 1 October.
  • Members who are currently on JobSeeker or JobKeeper and apply for relief by 15 October will have the premium increase on 1 October, 2020 waived (applied as a one-off credit that covers the cost). This means these members wouldn’t end up paying any extra until 1 April, 2021.

For more information about nib’s health cover changes and details of policy suspension options, head to its website.

This is not a comprehensive list of all COVID-19 financial assistance available from Australian health insurers. Check with your insurer for further information about what options may be available to you.

 

This article was reviewed by our Sub Editor Tom Letts before it was published as part of our fact-checking process.

 

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