27th Mar 2018
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What to do to avoid the private healthcare hike on 1 April
Author: Ben Hocking
What to do about healthcare hike

The recent YourLifeChoices Retirement Income and Financial Literacy survey shows that around 72 per cent of retirees retained private health cover, but 25 per cent said their health insurance bill was the single biggest challenge to being able to live within their budget.

In just four days, private health insurance premiums will increase by an average of 3.95 per cent. Some funds will increase their premiums by as much as eight per cent.

Regardless of the premium increase applied by your health insurer, every Australian over the age of 65 will have their health insurance rebate reduced. This means that if you are a pensioner you’ll either have to pay more upfront or receive a lower tax offset, and that’s on top of the increased premium cost.

If you want to save money, you will have to shop around for the best deal. No private health insurers reward loyalty, in fact the opposite is true, so you have to get out there and find the best deal.

You don’t have long to act, either. With the private health insurance price rise falling right in the middle of the Easter weekend, if you are going to switch funds you only have today and tomorrow to get it done.

One of the reasons people are hesitant to change funds is because of the complexity built into the system. According to the Retirement Income and Financial Literacy Survey, 50 per cent of respondents said health insurance policies were too complicated to understand properly and there was a high degree of dissatisfaction at what was being offered. Many believed that policies were too expensive and that there were too many gaps.

Switching funds, though, is not as difficult as it sounds, and in the final days before the hike takes effect, you may be able to negotiate a deal that sees you avoid a price rise altogether.

When you change funds, as long as the procedure is covered by your new provider, you carry over all your previously served waiting periods.

You are also entitled to a refund of any premiums you have paid in advance, and can still claim procedures up to two years after they happened regardless of which fund you’re with now.

There are also many health-care comparison sites that can take some of the grunt work out of your hands, but be sure to check if they compare all of the options available and investigate their commission structure so you understand if they are a reliable source of information.

Opinion: Time to cap private health increases

Earlier this year, Labor announced a policy that would cap private health insurance premium price rises at two per cent a year for two years.

Prime Minister Malcolm Turnbull attacked the move as “policy on the run” and accused Labor of trying to destroy private health insurance.

The simple fact, though, is that a cap on premium increases is nothing new. In 2000 and 2001, the Howard government implemented an effective ‘freeze’ on private health insurance premium increases.

The fact that it was a Liberal Government that last saw the need for a cap on premium increases shows that this does not need to be an ideological battleground. This is clearly a solid policy aimed at stopping soaring premiums.

Since 2013, when the Liberals came into office, health insurance premiums have risen by 27 per cent, private hospital coverage has dropped and the profits of these companies have sky-rocketed.

As our members have told us in our Retirement Income and Financial Literacy Survey, price is not the only concern when it comes to health insurance, with many retirees struggling to deal with the complexity of what is and isn’t covered by their policies.

At the same time as announcing its premium-cap policy, Labor also announced that it will get the Productivity Commission to conduct a full review of the private health insurance system.

In reality, this could have a much bigger impact than simply stopping out-of-control price rises. It could force insurers to clarify their lists of confusing exclusions, while tackling the lack of competition in the sector.

It is clear to most that something needs to be done to address the problem in the sector. The only question is if we need to wait until the next election before someone is willing to tackle the problem.

Do you welcome Labor’s proposal to cap private health premiums? Do you struggle to maintain your private health cover?

All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Are you eligible for an Age Pension? Do you know your rights? The RetirePlanner tool has all the information you need.

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    COMMENTS

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    patti
    28th Mar 2018
    10:26am
    How to handle it? do what I did - leave the private health insurance behind. In an emergency a public hospital will always care for you. I have extras cover but hospital is too expensive for someone on a pension. And there is always a gap to pay - $6000 in my case - so I take my chances in the public health system now. I word hard at staying healthy
    MICK
    28th Mar 2018
    5:32pm
    My thoughts entirely.
    A few people have no choice. Very few. Others are conned or stay in this bad system because of fear. Their choice. Their money. Good luck guys.
    Oh yes, don't complain when you pay unjustifiable sums of money to this cartel for top cover and they slug you a bucket full more for "the gap". They'd be inrapyures.
    Cowboy Jim
    28th Mar 2018
    10:33am
    Certain procedures in hospital are getting more expensive and also more complicated every
    year and costs are going up. We are expecting expensive operations without paying anything. I would like to see everyone in a health fund and spread the burden more equally.
    Personally I feel I have to keep our membership, not getting any younger. Do not like the increases one bit but then everything is getting dearer!
    downunder
    28th Mar 2018
    10:47am
    There is also another possibility to save money instead of having the money sitting in a low-interest paying bank account you can prepay you health insurance for 12 to 24 months in today's $$. This is of course if you have the funds available. If something happens your fund will reimburse you for not used periods. Make your figures!
    fairplay
    28th Mar 2018
    11:14am
    Hi Downunder, you are correct that you can lock in the OLD rates if you pay up front before 1st of April, but our fund advised you could only pay forward by 16 months ( Govt rules apparently)...we are in S.A.
    Cowboy Jim
    28th Mar 2018
    11:24am
    Got the same advice from my health insurance and we live in NSW.
    Old Geezer
    28th Mar 2018
    11:47am
    I am paid 16 months in advance myself.
    miker
    28th Mar 2018
    11:14am
    The cost of premiums seem to endlessly increase whilst the medical conditions covered seem to endlessly reduce. And we read the horror stories, over here in the West, there is a huge waiting list for non emergency procedures with some folk waiting for years to be seen.
    Old Geezer
    28th Mar 2018
    11:50am
    Even in an emergency if you have private health insurance you will be put at the top of the queue. People without health insurance will be queued according to how serious their condition is. OK they say that doesn't happen but I have witnessed it happen myself.
    Rae
    28th Mar 2018
    2:13pm
    All those millions of immigrants were not catered for by training of doctors, nurses or building hospitals. It's a pure Government fail.
    mike
    28th Mar 2018
    11:17am
    Didnt the government just reduced the amount of rebate , so why blame the funds, they have to pay out on claims and claims are expensive. So lay the blame where its due, Halal Mal and his bitch sidekick who send hundreds of millions every year in foreign aid to Muslim countries, thats after they fill their own back pockets and keep on hitting the pensioners and self funded retirees.
    GeorgeM
    28th Mar 2018
    11:27am
    Yes, just noticed that the article mentions "every Australian over the age of 65 will have their health insurance rebate reduced" - Did not hear about this in the media?
    Is this an Age Discriminatory action by this Govt which has gone unreported by the mainstream media or even by the morons in Labor?
    Cowboy Jim
    28th Mar 2018
    11:27am
    Do not just blame Mal for the squandering of millions. Have you forgotten Rudd and his buttering up of foreigners to get his coveted UN position. Foreign aid has always been greater under Labor.
    Sundays
    28th Mar 2018
    1:22pm
    George, I would also like more information on this supposed change. The rebate changes every year on 1 April based on a formula calculated by the Health Department using CPI as a base. The figures are published by ATO. They went down last year too but not just for over 65. I think this article is misleading.
    Hairy
    29th Mar 2018
    9:32am
    On yah mike
    sunnyOz
    28th Mar 2018
    11:19am
    Am sick and tired of seeing my premiums go up double what they say the increase will be. I am just about ready to ditch it as I am so sick and tired of seeing my friends - with health insurance - end up paying thousands out of pocket, whilst the person sitting next to hem (having chemo) had exactly the same waiting time, but not a penny extra to pay. We are hit 3 times - (1) Private Health Insurance Premiums (2) Medicare levy (3) gap/extra fees. It is nothing but a rort - blackmail.
    Rae
    28th Mar 2018
    2:18pm
    Don't tell them you have insurance. Just because you have it doesn't mean you are forced to make a claim on it.

    I have no intention of using mine in an emergency. Only if it's elective and will get me in quickly although a couple of friends just negotiated with the specialist and paid a discounted price upfront.
    sunnyOz
    28th Mar 2018
    11:22am
    Plus a report only 2 days ago was on how doctors in Australia are marking up costs sometimes TEN TIMES the approved amount. Maybe if their first interest was their patients, not their pockets, we could survive. But not when rural relieving doctors get $2,700 per day!
    Rae
    28th Mar 2018
    2:21pm
    I've always believed doctors should be assigned patients randomly and be paid yearly if you stay well but have to treat you for nothing if you get hurt or become ill.

    There wouldn't be a sickness industry then but a Wellness one.
    GeorgeM
    28th Mar 2018
    11:24am
    This discussion is a repeat of an oft raised issue, and is a complete waste of time, as no political party is seriously tackling the lack of value & rip-off offered by Private Health Insurance.

    Firstly, the Private Health Insurance system in Australia is a fraud on the people, as the Govt forces it on people (with penalties), approves large increases in premiums every year, and yet forces Patients to bear the Risk of Gaps and high Doctors fees. Insurance companies need to bear Risks of Gaps (all except 15% of Medicare Scheduled Fees) and high Doctors Fees, including for costs of Diagnostic Tests and Pharmaceuticals. Otherwise it is NOT Insurance, simply a scheme to refund part of costs. Insurance companies are getting away with a complete con on people without taking on these Risks, and making great profits.

    Secondly, Doctors / AMA are allowed by the Govt to set Fees and rip off the people with large gaps. Govt, NOT AMA, needs to set realistic Medicare Rebates for Fees, and impose a MAXIMUM for Fees charged by doctors of say 25% in excess of that - if doctors can justify it.

    Finally, the Govt needs to change Laws as needed, and allow / persuade / force Insurance companies to cover all Risks for Gap Fees and all Medical Costs (all except 15% of Medicare Scheduled Fees), and then create a competitive market by ensuring Standard Products with FULL (100%) coverage are offered.

    Any chance YLC would push for the above?
    patti
    28th Mar 2018
    11:42am
    Any way you look at it, we are being ripped off. Cowboy Jim, the ideal would be to have everyone in a health fund, but I could not afford it. Struggled for years to pay it - on a pension - but finally the gap fee beat me. Yes, I have had to wait sometimes, but can't fault the care I get in public hospital here in Qld
    Cowboy Jim
    28th Mar 2018
    12:21pm
    patti - I mean a health fund for all to the tune of about $1000 a year,
    about a pack of smokes these days.
    KSS
    28th Mar 2018
    12:48pm
    Cowboy JIM after the $2.70 rise last September the average cost of a pack of cigarettes rose to $35.20 (30 in a pack). Few smokers would only smoke one pack a week but if they did the cost would be $1830.40 a year. Most smokers would be smoking the best part of a pack a day ultimately costing $12812.80 a year!

    So you would need to at least double your $1000 to make it worth while. $1000 will not get you much of a health insurance these days, smoker or not.
    Cowboy Jim
    28th Mar 2018
    4:28pm
    You are right K S S - it has been a while since I bought cigarettes although I did smoke for 32 years (silly me) but then the pack was only 13c for 20. If you say $2000 a year it would be too high for a lot of people, I just paid $4760 for the 2 of us for next year to the end of March. Thanks for the correction re price of ciggies.
    KB
    28th Mar 2018
    12:37pm
    I am struggling to pay for health insurance but need to keep it up due to health issues Going through the public system means seeing different GPS and explaining health issues over and over.My specialists are good and do not charge any gaps For me it is peace of mind and have the best of both worlds. Yes the government must cap premiums The more people who drop health insurance then it will be harder to access hip and other replacements iue to a longer waiting list
    KSS
    28th Mar 2018
    12:59pm
    True but not all older people ever need a knee or hip replacement.
    I have been looking at this precise issue over the last few days. I currently have a top level cover that includes hips and knees. It does not include pregnancy or other fertility procedures like IVF. Strangely it DOES cover sterilisation reversal! WHY?

    Anyway, if I forgo the hip and knee replacement cover (and dialysis and cataract surgery) my cover will drop in price by $500 if I pay before 1 April and by almost $600 on 2 April! Given I am very healthy and more likely to suffer an accidental breakage of the hip or knee (rather than as a result of a degenerative disease) which would still be covered, I am inclined to downgrade the coverage making my premium around $24 a week! If I needed kidney dialysis I would get it under medicare, likewise cataract surgery. Or I could up the level of cover and wait out the exclusion period (which may well be the same as the public waiting list) and then go private!
    Sundays
    28th Mar 2018
    3:33pm
    KSS if that’s what you decide, put some money aside anyway. For example, my friends mother had to wait 5 years for cataract surgery on the public waiting list in QLD. Poor thing was nearly blind
    fearlessfly
    28th Mar 2018
    12:48pm
    Dump it ! I did a couple of years ago. The so-called "Private Health Insurance" companies have elevated themselves right square into the territory occupied up until now by the bastard Banks. Total pack of corrupt assholes ! Methinks we now need an official Royal Commission of Enquiry into their behaviour, run also by the fearless Commissioner Kenneth Hayne and the excellent forensically ferocious Rowena Orr doing the detailed skewering !
    Troubadour
    28th Mar 2018
    2:04pm
    All this Health Insurance increase is still so confusing - and yes it is out biggest payout each month BUT pondering will I won't I ditch it - is a health issue in itself!! My husband had an emergency scare last year and was taken to a Public Hospital by Ambulance (covered) he was in Hospital for 4 days had good treatment as a private patient - and the hospital paid for part of the bill and our Private health the other part - we did not have anything to pay - so will probably continue with out health Fun for now. However there is a need for capping and more assistance for over 65's
    Old Geezer
    28th Mar 2018
    2:57pm
    I had a week in hospital last month and even with private health insurance it cost me nothing. They even filled a prescription for me to take home for free. I was also transferred by ambulance from one hospital to another. I did notice I had a team of doctors looking after me and the public patients only had one doctor.
    Grateful
    28th Mar 2018
    2:51pm
    The question that should also be being asked is WHY there are so many large gaps payable to surgeons and anesthetists in private hospitals when a patient has the highest and most expensive private health cover??
    What about doing something about putting a cap on "gaps"!!!!
    Schedule fees are being joked about by those professionals, so, what about the ACCC being forced to investigate.
    GeorgeM
    28th Mar 2018
    3:13pm
    Ben Hocking, could you please clarify the comment in the article that "every Australian over the age of 65 will have their health insurance rebate reduced" - I did not hear about this in the media?
    If true, is this an Age Discriminatory action by this Govt which has gone unreported by the mainstream media?
    Daz
    28th Mar 2018
    3:35pm
    I am not sure how the average of 3.95% is calculated by the Minister, but going by my hefty price increase and that of others I have spoken to, it seems way off. For so many people to have a much higher increase than the 3.95% average, requires just as many people to be under 3.95%. I would say this is not true. Mathematically what they have quoted could not possibly include everyone, which is deceitful. I suggest they have looked at the most number of people whose increase was that and quoted that figure without including the tens of thousands of people who’s increase was substantially above 3.95%. I am incensed, and powerless it seems to do anything about this years 13.96% increase. Yep, just under 14%. I have asked my Health fund and the Minister for an explanation. So far haven't heard back from either.
    KB
    28th Mar 2018
    3:39pm
    KsSS Good for you but what if you accidentally injured your knee or hip? My sister tore her meniscus in her knee and will have to undergo ARThROSCOPY to repair the meniscus.Thank goodness for insurance. None of us know what will happen around the corner.
    Sundays
    28th Mar 2018
    3:39pm
    There is nothing wrong with the Public Health system, that’s where you will go in an emergency. If you need X-rays in the middle of the night you will get them unlike a Private hospital. Friend with cancer got the best care, with specialist who also work private. The problem is for elective surgery there are long waiting lists. We’ve dropped Extras but can’t yet drop hospital even though it is a rip off

    28th Mar 2018
    3:39pm
    Stupid labor
    Capping health insurance premium will result in detrioration of cover
    Shorten simply understand basic economics and has no business acumen - economic retard who will send the country bankrupt

    72% of retirees can afford private insurance - so there is no problem really is there
    Rae
    29th Mar 2018
    6:42am
    Labor isn't in and there is no guarantee they will win an election. It is the LNP that have let health costs get too high and who encouraged a private system for profit.

    The Insurance Industry is a pet of the LNP who should be able to contain it a little.
    ex PS
    29th Mar 2018
    9:30am
    Costs up every year and gap payments getting bigger at the same rate. How much further can it deteriorate?
    Well I'm not waiting to find out, I'm bailing out. Just because you can afford something, does not make it value for money.
    I could afford to buy an ash tray for my bike, but it would not be good value for money.
    Old Man
    28th Mar 2018
    4:24pm
    Capping health insurance is merely a false election promise. Sure, they can tell the health insurers to cap the increases, they may even try and legislate for it but it will all be to no avail. Our insurer trumpets that it is going up, on average, less than 4% but our increase is nearly 7%. I note that Daz has an increase of nearly 14%. What is needed is transparency, not juggling numbers to give an acceptable average. Smith, Warner and Bancroft will be able to get a job with the health insurers.
    Knows-a-lot
    28th Mar 2018
    4:54pm
    Private health insurance is a SCAM. Don't waste your money on it.
    JO
    28th Mar 2018
    6:55pm
    http://www.abc.net.au/news/2018-03-28/do-you-really-need-private-health-insurance/9596276
    Copy and paste if link fails ????
    JO
    28th Mar 2018
    7:03pm
    A recent example of this is the announcement from Bupa that from August 1 members will face higher out-of-pocket costs in private hospitals that don't have a special relationship with the company, and some procedures will be excluded from particular policies.
    . For those who are older, inclusions such as hip replacements and cataract removal may be more important.

    The Australian Government website PrivateHealth.gov.au or the Choice health insurance finder are good places to start. These include all registered health funds in Australia and allow you to compare what is covered in each policy.
    Rosret
    28th Mar 2018
    9:07pm
    Private Health insurers want the elderly to pull out. We cost them too much.
    ex PS
    29th Mar 2018
    9:25am
    I have just got new glasses, had some dental work done and am awaiting one lot of medical testsresults. If the tests come back and I am OK, I will immediately bail out off the Private Health System.
    It is no longer good value for money.
    casey
    29th Mar 2018
    11:58am
    When my daughter had a baby, she had private health cover. The lady who shared her room had no health cover, saw the same doctor got the same treatment and had no gap to pay.
    My daughter no longer has private health cover.


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