Health funds’ sneaky rise Premiums jump to be greater than promised
HEALTH fund premiums will rise by as much as $400 a year from Wednesday, with many fund members slugged more than twice the promised average 2.9 percent increase.
And the so-called “average” 2.9 per cent premium rise figure used by the government is misleading.
It is not an average of the premium rises of all the policies offered by health funds, but represents the percentage rise in the premium income that health funds receive.
The Department of Health said the percentage change in forecast contribution income was“considered to be the most appropriate way of reflecting the price change in premiums that will be received by an insurer”.
Health Minister Greg Hunt and the insurance industry used this 2.9 per cent figure to boast that this year’s average annual premium rise was the lowest in two decades, but many health fund members are facing the same 5-6 per cent rises they’ve experienced in the past.
“From April 1,2020, a single person will pay an average of $0.68 extra per week ($2.72 month $35.36 a year) family on average will pay $1.99 ($7.76 month $103 a year) more a week ,” Mr Hunt claimed when he announced the premium rises.
Choice health spokesman Dean Price told News Corp. Australia the figure was “almost, I guess, misleading ”.
“It’s definitely not how people will interpret that figure,” hesaid.
“And it helps explain some of the shock that people feel when they get that notice from a health insurer notifying them of the increase, which is above the publicly-stated average increase that their fund is passing on.”
The nation’s largest health fund, Medibank, is raising the price of some of its Gold policies by 6.7 per cent and many Silver Plus policies by 5.9 per cent.
Bupa, Australia’s second largest insurer is raising the cost of one Silver policy by 5.6 percent.
Some HCF members are facing premium rises of 3.2 per cent on their family cover.
NIB says its Silver policies will increase by an average 4.3 percent and its Basic plus policies by 3.9 percent.
Medibank said across its hospital products, the lowest premium increase was 0% and the highest was 7%.
The health fund said 71 per cent of Medibank customers on a singles policy would pay an average increase on their premium of $3 or less per week, while 77% of family policies would increase by $6 or less per week.
Health funds delayed their annual April 1 premium rises for six months after the government imposed surgery bans due to COVID-19. Now their members face two rises in six months.