What Impacts The Cost of Private Health Insurance in Australia?
When it comes to both Medicare and private health insurance, you probably worry about getting the right coverage for your needs with Private Health Insurance and if you’re paying too much. Of course, when you start doing a private health insurance comparison, especially when looking at the differences between Medicare and Private health insurance, there is so much to consider! Especially how much it costs! Arrrrgh. We all want to save on the hip pocket.
Most premium increases are based on averages in the industry, but how customers are affected depends on their fund, policy, and other things. Billy Explores is here to help you! We know that the best way to do a private health insurance comparison is to do it through Billy Explores. But we will go a little bit further here. We’ll talk about the main things that affect how much you pay for health insurance. If you understand these, you can think about what you could do to keep your costs down while balancing cover needs and budget concerns. Then you have the tool kit you need to compare health insurance in Australia and move forward with a private health insurance comparison through Billy Explores!
Cost of Medical Practitioners + Fund
At an industry level, the main reasons for the level of the premiums are current and forecast increases in benefit outlays. This includes the increasing costs of treatments and services (in particular increased costs due to technology and higher provider and contracting costs) and higher utilisation of treatments and services. Other reasons stated by insurers for premium increases were:
- Maintaining long term viability, including adequate underwriting (net) margins and sufficient capital to meet prudential standards and benefit outlays;
- Absorbing increased costs associated with an ageing membership profile; and
- The rising cost of payments to the risk equalisation pool.
In a nutshell, this means that the cost of actually providing benefits and services has increased, so funds have to recoup this somehow. Of course, the best way to really get the Fund and policy for your needs is to understand how to properly compare health insurance in Australia, the differences between Medicare and Private Health Insurance. Then you can accurately do a private health insurance comparison.
Your Age When Signing up
Lifetime Health Cover (LHC) loading is an extra fee you pay to your insurance company on top of your premiums. It applies to people who don’t get private hospital insurance until after their 30th birthday, on July 1 of the year after their birthday. LHC is meant to encourage people to get hospital insurance when they are younger, when they are less likely to get sick. LHC doesn’t care about how old you are. Instead, it’s based on how long you wait to get hospital insurance. The longer you wait, the more your premiums will cost.
For every year after your 30th birthday that you wait until after July 1 to get hospital insurance, your premium goes up by 2%. If someone waits until they are 40 to get hospital insurance, for example, they might pay 10% more. The most that can be loaded is 70%.
Since they were first put in place in 2000, the LHC rules have been changed a few times. One of these changes was the 10-year-loading-removal rule. Once you’ve had hospital coverage for 10 years in a row, this rule takes away your loading. Before, LHC loading was meant to stay there forever.
We have covered the LHC in a number of other articles. Unfortunately if you think you will get a better deal on the LHC cover by doing a private health insurance comparison, unfortunately this is not the case. Even to compare hospital cover, you still won’t get anywhere by doing a health insurance comparison unfortunately.
To get people to buy hospital insurance, the Australian government has set up incentives and extra fees. Your income can change how these incentives and taxes affect you and, in turn, how much you have to pay for health insurance overall. Of course, this is quite different to how Medicare and private health insurance operate.
No matter if you have hospital insurance or not, you have to pay the Medicare levy unless your income is below a certain level. Also, if your income is above a certain level and you don’t have private hospital insurance, you’ll have to pay the Medicare levy surcharge (MLS). Single people who make less than $90,000 and families (or couples) who make less than $180,000 won’t have to pay any MLS.So it does make send to compare hospital cover in Australia anyway, as opposed to doing an extras insurance comparison.
In MLS, 1%, 1.25 %, and 1.5% of your income go to the government. The top-tier income thresholds are currently $140,001 and up for individuals and $280,001 and up for couples (families and couples). Most Australians don’t have to pay the MSL, so this isn’t a great way to save money on taxes or overall health care costs (of course, doing a health insurance comparison is the best way to save money – start your private health insurance comparison here).
Your Family Structure
As you go through different stages of life, your health insurance needs will likely change, and if your family situation changes, you may need to switch to a different type of policy.
For example, kids who used to be covered by their family’s policy as dependents will need to find their own coverage when they stop being dependents. Depending on the insurance company, a dependent can be anyone under the age of 25. The amount they have to pay will change because of this. When you get married, you might switch to a policy for couples, which could save you money if the fund gives discounts for combining policies.
As you plan to have kids, you might decide to upgrade to a policy that covers pregnancy and other services. This usually means you’ll have to pay more. When the kids come along, you may want to switch to a policy with more extras, such as dental and vision care (or finding the best optical extras cover).
Word of note about waiting periods. If you’re planning to have children you may have to sit out specific waiting periods for your policy, so it’s also a great idea to do a health insurance comparison to get the best value pregnancy cover for your needs. By doing a private health insurance comparison you will really be able to identify the best cover for your needs, as well as review the difference between Medicare and Private Health Insurance and how they both treat pregnancy.
Where You Live
Health insurance funds don’t treat people differently based on where they live. Access to facilities, on the other hand, could change the price of your premiums, and this is usually taken into account on a state or territory level. This is because the number of hospitals in your state, the cost of health care, and other things that depend on your state or territory can change how much your policy is worth. Because of this, when people move to a different state, their premiums or benefits can change even if they keep the same policy. So it’s a good idea to keep tabs of this and do a health insurance comparison if you’re moving interstate. By doing a private health insurance comparison through Billy Explores, you will be able to quickly identify a range of policies for your needs.
Also, people who live in rural areas might not get as much use out of their health insurance because they live far from cities and only 16% of the facilities outside of major cities are private.
When You Review Your Policy
Lastly, the cost of your health insurance could change if you look at it again and decide to upgrade or change it in some other way. For example, you might decide that adding extras is a good idea, or as you get older, you could switch to a better hospital policy.
Every time you review your policy it’s definitely time to do a health insurance comparison. Why not compare hospital cover in Australia, as well as doing an extras insurance comparison, while you’re doing your private health insurance comparison?
Private Health Insurance Comparison – It’s Time!
So we’ve reviewed what impacts private health insurance costs in Australia (health insurance comparison time!). The best way to both compare hospital cover in Australia and compare health insurance in Australia is to do a private health insurance comparison through Billy Explores! Not only will you save time and effort, but you can explore potential savings and get the best value deal for private health cover for your needs from our panel of providers. You can also find the best optical extras cover for your needs! You also know the cost differences between Medicare and private health insurance, so to start to do a private health insurance comparison, you just need to click here!