HomeHealthHealth InsuranceAverage health insurance premiums to rise by 3.03 per cent

Average health insurance premiums to rise by 3.03 per cent

After weeks of push and pull between health insurers and the federal government, the average private health insurance premium will increase by 3.03 per cent this year, just narrowly trailing Age Pension, inflation and wage rates.

Health minister Mark Butler announced the changes, set to come into effect from 1 April, after protracted negotiations between his office and health insurers, who were initially pushing for increases of around 6 per cent.

The average health fund premium will now rise by $121 annually.

This is lower than the latest consumer price index figures (4.1 per cent), the last Age Pension increase (3.25 per cent) and the average wage rate (4.5 per cent).

“I wasn’t prepared to just tick and flick the claims of health insurers, as the Opposition was urging me to do,” Mr Butler said in a statement.

“I asked insurers to go back and sharpen their pencils and put forward a more reasonable offer for the 15 million Australians with private health insurance.”

While certainly lower than 6 per cent, it’s still the largest average increase seen in three years, after two consecutive years of increases below 2 per cent.

Your premium will likely rise even higher than that

Around 80 per cent of all health insurance customers are insured by just five funds – HCF, NIB, Bupa, Medibank/ahm and HBF – and the average increase for those funds is closer to 3.5 per cent, meaning most people are up for an extra $142 a year.

The largest approved increase this year went to CBHS Corporate Health, where premiums will go up 5.87 per cent, while the smallest is from Health Care Insurance (HCI) with just a 0.27 per cent jump.

Older Australians hit harder (again)

Unfortunately, it’s policies held by older people that experience the sharpest price rises. The average policy for a single person aged 55 or over will go up between $90 and $100 a year for the five major insurers, or up $150-$200 for couples, but smaller funds like HCI are only lifting prices by $8 and $16 respectively.

The worst offender for older Aussies was again CBHS Corporate Health, where research from Compare Club shows a policy for a couple over 65 will be going up by a whopping $340.

No time to compare?

Health insurers can apply to the federal government to increase their premiums once each year. These negotiations begin in November of the previous year, and are usually wrapped up by January.

This gives insurers time to communicate their increases to members during February and March, with customers customarily given a 30-day notice period.

However, this year, negotiations have not played out like that. Health insurers initially approached Mr Butler with an average increase closer to 6 per cent, much higher than the headline inflation rate.

The increases were rejected, and the insurers told to go back to the drawing board to find a more reasonable figure. What all this toing and froing means is that customers now have less than 30 days to consider their options before the new rates take effect on 1 July.

Still, it is absolutely worth shopping around.

The total average premium increase since 2019 is 15.9 per cent, which means if you haven’t compared your health insurance in that time, you’re now paying $810 extra each year for couples, $723 for families and $376 for singles.

Paying that much extra for the same (or sometimes even less service) is a financial waste few can afford. If you’re worried about waiting periods, it is possible to waive those periods if you’re moving to cheaper equivalent cover.

Compare Club’s Head of Research, Kate Browne, advises the best way to fight back is to review what you have now and compare it to what else is out there.

“Being hit with the biggest increase since 2017 is adding more pressure to household budgets, after massive hikes in car and home insurance premiums,” she says.

“But the good news is there is a lot of competition for your business and there are several good deals on offer right now including up to 12 weeks free. Swapping health insurers can take less than half an hour and can save you hundreds of dollars and get you more bang for your buck in terms of value.

Many people are concerned about having to serve waiting periods if they switch insurers, but Ms Browne says that’s not the case if you’re moving to a similar level of cover.

“Reviewing and swapping health insurers is easy and quick to do. There are no waiting periods to serve if you swap like for like cover and the entire transfer can take less than 30 minutes with no paperwork.”

It all comes down to whether you personally feel you’re getting value for money from your policy, so make sure you’re okay with yours.

By how much is your health insurance going up? Will you be shopping around for a better deal? Let us know in the comments section below.

Also read: Most complained about health insurance funds

Brad Lockyer
Brad Lockyerhttps://www.yourlifechoices.com.au/author/bradlockyer/
Brad has deep knowledge of retirement income, including Age Pension and other government entitlements, as well as health, money and lifestyle issues facing older Australians. Keen interests in current affairs, politics, sport and entertainment. Digital media professional with more than 10 years experience in the industry.


- Our Partners -


- Advertisment -


- Advertisment -

Log In

Forgot password?

Don't have an account? Register

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.