Act now to ease the annual health fund hit
PRIVATE health insurance members looking to reduce the impact of the latest premium price rises need to take action now.
The Federal Minister for Health, Greg Hunt, this month announced premiums will climb on average by 3.95 per cent on April 1 and despite this being the lowest rise in 15 years, experts say it’s no time to be complacent.
Premiums have jumped by an average of 29.75 per cent in the past five years so it’s vital consumers hunt for a better offer and not just stick with the one insurer.
Members will be notified by their funds in the coming weeks of the rises, which vary from fund to fund. Otherwise it’s worth picking up the phone and asking your insurer exactly how the hike will affect you.
Financial comparison website Comparethemarket.com.au’s spokeswoman Abigail Koch said the latest increase will put further strain on household budgets so it’s vital to check up on your premium and see if you are paying too much.
“Use the latest rise to get thinking about whether you can get more value from your policy and make sure your policy truly fits with your needs,’’ she said.
“Ask for your annual claims statement from your health fund so it will give you a clear idea of how you have used your policy over the last 12 months.”
There are two key components of private health policies – hospital and extras cover – and for some having extras may simply not be worth the cost.
Mother-of-three Angela Cornford recently signed up to hospital cover, which sets her back about $200 per month and said she spent some time hunting for a competitive deal.
“For tax purposes my husband and I took out hospital cover, I haven’t had it for some time,’’ she said.
Latest analysis by IPSOS Mori, on behalf of finance website comparethemarket.com.au, revealed the cost of cover can vary greatly so you need to pay close attention to your charges.
Before these latest rises kick in on April 1, for a family of four the average cost of hospital cover is $4040 but can be as high as $7333 annually.
For a single person the average cost is $2260 compared with the highest cover at $3365.
These charges do not include a rebate or Lifetime Health Cover loading, which slugs customers an additional 2 per cent per year over the age of 30 if they don’t have hospital cover.
Jan O’Keefe, general manager of Insurer AHM, which has more than 700,000 members, said it’s imperative consumers think about the cover they do need.
“Talk to your health insurer about what options they have got because new products come into market regularly and some health insurers have loyalty benefits, so the longer you stay with them the more benefits you get,’’ she said.
Another tactic is to pay your full year’s premium costs in one hit before the April 1 increase kicks in, which means you avoid the latest hike. But this can be an expensive outlay for people as it runs into thousands of dollars.