If you thought you’d done well to escape the worst of 2020’s annual private health insurance rate rise, think again. Premiums are increasing at the start of April – just six months after insurers last put their prices up.
Health fund premiums will be rising by an average of 2.74% in 2021*, but when you combine this with October’s average, it’s actually a 5.66% increase for most households over six months. Ouch.
So how do you keep your health insurance affordable while still making sure you’re covered for everything you need? It’s simple: compare and if you get a better deal, switch.
How much does loyalty to your health insurer cost you?
Staying loyal to the same health fund could really cost you. Let’s use an example.
In 2016, the average health insurance premium rose by 5.59%. Let’s say a family was paying $4,500 a year for combined hospital and extras cover.
Now let’s assume that the family didn’t switch cover and had the average annual rate rise applied every year, including April’s 2.74% average increase. They’d be paying $5362.09 on the same policy. That’s an extra $862 since they took out the policy.
Not sure how much your premium could go up by this use. Use our calculator to work out your insurer’s average premium increase:
It’s easy to get a better deal
It’s surprisingly easy to ignore your health insurance and end up overpaying by hundreds of dollars.
Health Insurance Comparison’s CEO Andrew Davis says that there’s some demographics who are sometimes hit harder than others:
“We’ve found that older Australians are especially vulnerable to falling victim to the common health insurance traps like staying on an outdated policy, being talked into a higher level of cover, and fund loyalty incentives.”
Fortunately thousands of smart Aussies have already beat the system by switching with Health Insurance Comparison. You can join them too in just a few clicks and beat the health insurers at their own game.
This article is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.
*Department of Health, Average annual premium price change by insurer, December 2020