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A number of Australia’s major health funds have announced they will be delaying their premium hikes for 2022, in recognition of the ongoing effects of COVID-19.
This move takes some of the financial pressure off consumers while presenting opportunities to compare and save on premiums.
Each year on April 1, Aussie health insurance providers review their premiums and adjust them, invariably upwards to take into account the rising costs of health care. This year, however, as was the case two years ago, a number of major Aussie health funds are holding off on their increases, to take into account the ongoing effects of COVID-19.
Canstar finance expert Effie Zahos said she has spoken to a number of major health funds, with some having delayed their price hikes on hospital and extras cover for up to seven months, and others currently in the process of reviewing the April 1 price hike.
Which health insurance providers are delaying their premium hikes?
Ms Zahos said that, having surveyed Australia’s largest health funds:
- Medibank has delayed its rate rise to September 1, when it will increase premiums by 3.1%.
- HCF has delayed its rate rise to November 1, when it will increase premiums by 2.72%.
- nib has delayed its rate rise to September 1, when it will increase premiums by 2.66%.
- Bupa is currently reviewing the date of its next rate rise, and will increase premiums by 3.18%.
Ms Zahos went on to say that many smaller players are also delaying their price hikes, so it might be worth contacting your health insurance provider to see if they are doing the same. If not, you may even have an opportunity to switch and save prior to April 1.
Price rises postponed as COVID-19 takes “financial toll” on Aussies
Mark Fitzgibbon, Managing Director of nib, said that postponing price rises is the “right thing” for health funds to do, given the ongoing financial pressure that COVID-19 has placed on the community.
“It’s a highly stressful time and I don’t want to downplay the financial toll it’s having on our members,” Mr Fitzgibbon said.
He noted that many healthcare services have been suspended or delayed thanks to the ongoing impact of the pandemic, with many major hospitals around Australia postponing elective surgeries as they grapple with the impact of the pandemic.
“By deferring premium increases we’re making good on our commitment to returning any permanent savings to our members,” he said.
As well as deferring its price hike, nib recently announced the extension of its COVID-19 support package for members until 31 December, 2022. This package includes such things as expanded cover for COVID-19 related treatment and psychology extras benefits.
“As the pandemic continues to evolve, so has the support we’ve provided to our members,” Mr Fitzgibbon added.
Some Aussies are at a “tipping point” over health insurance
Ms Zahos said that while the pause on premium hikes would offer some reprieve to consumers, the cost of health insurance typically rises faster than inflation, and premiums typically take a large chunk out of the average household budget.
For this reason, she said, many Aussies are reaching a “tipping point” where they are seriously considering whether they can continue to maintain their current level of private health insurance.
“At least once a year, consumers need to look at their private health insurance premiums,” she said. “Now is a timely reminder, before the premium hikes, for consumers to ask whether they’re still on the best deal, or if there is another policy that could suit them better.”
How can you save on health insurance premiums?
Ms Zahos said that right now, there are a number of things Aussie consumers could do to save on health insurance premiums. First and foremost, she said if you are experiencing financial hardship, ask your health fund what it can do for you as many will have hardship programs in place to assist you in retaining your cover. If you are a long-standing customer experiencing financial hardship, you may find that your health fund is willing to extend you a period of complimentary cover or allow you to suspend your cover for a short time.
If you have lost income this past year, check to see what level of private health insurance rebate you might be on, as the lower your income, the higher the rebate you could get on premiums. “When you do your tax return, make sure you claim the rebate, and make sure your income is correct,” Ms Zahos said. “You may have lost a lot of hours, and that will impact how much rebate you will get – you may get a nice surprise there.”
You can also consider “mixing and matching” your health insurance providers, splitting up hospital and extras cover if you can find better deals with different providers. Likewise, if you’re part of a couple, you might assume that a couple’s policy will offer the best savings, but this isn’t always the case.
“As Gwyneth Paltrow once said, you can think about ‘consciously uncoupling’ – you and your partner might have very different health needs, so you might find that there are some savings to be made by doing that,” Ms Zahos added.
The 2021 Federal Budget increased the age that adult dependents can stay on their parents’ private health insurance from 24 to 31, so Ms Zahos said that another way to save on premiums is to ask them if you can “piggyback” off their policy, as this could mean a saving in premiums.
Ms Zahos added that some health funds are also offering cash back to members who cancelled their cover in the latter half of 2021. “Medibank customers who are no longer active but held an active resident policy between 1 July 2021 and 31 December 2021 will be eligible for a give back,” she said.
Cover image source: Bojan Milinkov/Shutterstock.com
This content was reviewed by Sub Editor Tom Letts as part of our fact-checking process.
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