Four health funds increased their premiums on 1 November 2022. Private health insurance companies normally only increase their premiums on 1 April each year. The question most Aussies have to ask themselves is, “do I have to put up with the recent health insurance premium increase?” The answer of course is no! And Billy Explores is here to help!
In this article, we will explore the reasons why premiums increase, how much they normally increase by and what you can do to make sure you’re getting the best deal on your private health insurance policy. While the premium increase is expected, it is a great opportunity for Aussies to remember to do a private health insurance comparison. Of course, the best and easiest way to do a private health insurance comparison is through Billy Explores. Also, thanks to the Commonwealth Ombudsman for this information! To get started on your private health insurance comparison journey, just click below.
The reasons and processes behind premium increases, and your options if you’re considering changing your health insurance policy and how to do a private health insurance comparison.
Why Do Premiums Increase?
The benefits paid by health insurers can increase when hospital, medical or other health related costs rise, and if their members have an increase in the use of health services. Factors leading to cost increases can include wages for nurses and hospital staff, doctors’ charges, the cost of medical equipment and technology and more complex and costly procedures being available through private hospitals.
While all insurers maintain reserves to cover unexpected increases in benefit costs, this can only assist temporarily. If insurers experience or expect an ongoing increase in the cost of benefits they must increase their contribution income by increasing premiums in order to stay financially viable.
With premiums increasing, it’s a great reminder to do your private health insurance comparison, and compare health insurance Australia!
How Much Has My Fund’s Premiums Increased?
If your premium has increased, your health fund is required to notify you in writing and you will receive updated policy information with more information about the change.
If your increase was higher than the average, the fund has been able to demonstrate that the rise is necessary to cover the benefits offered by your policy. Such increases are generally an indication that the particular health fund policy has been previously underpriced.
Doing a health insurance comparison will quickly and easily show you which health fund premiums have risen. So get comparing today, and do a health insurance comparison Australia through Billy Explores.
But Who Approves Premium Increases?
The Private Health Insurance Act 2007 requires health insurers to submit details of proposed premium increases to the Commonwealth Minister for Health before they can increase premiums on any of their policies. In their submissions, insurers must provide detailed financial information and cost and benefit projections to justify any increases they seek. An accredited professional actuary must have certified this information.
The proposed increases are examined by the Department of Health and by the Australian Prudential Regulation Authority (APRA). APRA is the independent health insurance financial regulator. APRA has the power to require insurers to report on their finances and operations and can independently audit insurers’ finances.
Health insurers must obtain approval from the Minister before applying a rate increase. If the insurers cannot provide sufficient information to demonstrate to the Minister that an increase would be necessary to meet their obligations to pay benefits to eligible contributors, then there is no change to the premium.
You Don’t Have To Put Up With Premium Increases
If you consider that you cannot afford the increased premium, there are still a number of options for you to maintain private health insurance. (You may need to maintain hospital cover if you wish to preserve your Lifetime Health Cover status and to avoid the Medicare Levy Surcharge.)
Your current health insurer or another insurer may be able to offer you a cheaper alternative private health insurance policy that still meets your needs. Check what benefits your existing policy offers and consider whether you do need that level and type of coverage.
For hospital cover, most insurers can offer cheaper options if you are prepared to make a higher initial payment (an excess or co-payment) towards the cost of any hospital admission. You might also decide to opt for reduced benefits for some ancillary services.
However, you should take care to understand the range of benefits and any conditions or restrictions before choosing a cheaper cover. In general, we would recommend that you give priority to maintaining a good quality hospital cover, to protect you against the risk of large hospital bills.
Hospital Cover vs Comprehensive vs Extras
We’ve already done some great articles on this topic. Hospital vs Extras vs Comprehensive coverage. Before you do your private health insurance comparison, review your current policy and make sure you’re getting the best value deal for your needs and budget. Do you need top level coverage? All of this will help when you start your journey along your health insurance comparison Australia.
Compare Health Insurance Australia
Of course, as we have mentioned, the best and easiest way to make sure you’ve got the best health insurance for your needs and budget is to do a private health insurance comparison through Billy Explores. Save time and effort and explore potential savings! Start your health insurance comparison today Australia!
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