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Health insurance price increase 2020

 

Health insurance premiums are set to increase on April 1st, 2020 by an average 2.92%
health insurance price increase 2020

It’s that time of the year again. The Federal Health Minister Greg Hunt has announced the 2020 private health insurance increase. April 1st each year marks the annual private health insurance price increase and here we are leading up to an average 2.92% increase across the board. Comparatively, this is the lowest industry increase since 2002, where most years the percentage increase sits around 3.5 to 5.5%.

Does this mean my health insurance premiums will increase by 2.92%?

Short answer is No.

It’s of utmost importance we highlight early on that this does not mean your health insurance policy is going to increase by 2.92%. This couldn’t be further from the truth. This is just a weighted average increase across all health funds in Australia. The table below breaks down each health insurer individually and shows what their projected increase will be in 2020:

Health Insurer% increase
ACA3.94%
Australian Unity2.79%
BUPA3.26%
CBHS Corporate2.37%
CBHS Health Fund3.91%
Hunter Health3.96%
CUA3.99%
Defence Health3.49%
Doctors’ Health Fund3.29%
GMHBA/Frank3.34%
HBF1.98%
HCI3.75%
HIF5.58%
Health Partners2.77%
health.com.au3.94%
HCF3.39%
Latrobe Health3.49%
Medibank3.27%
Health Insurer % increase
Mildura District Hospital Fund4.68%
MyOwn5.63%
onemedifund2.99%
Navy Health3.49%
NIB2.90%
Nurses & Midwives Health3.74%
Peoplecare 3.48%
Phoenix Health3.10%
Police Health3.14%
Queensland Country Health3.56%
TUH2.66%
RT Health2.91%
Reserve Bank Health Society3.08%
St Luke’s Health2.90%
Teachers Health Fund3.24%
Transport Health2.59%
Westfund4.32%
AVERAGE2.92%

Even still, the increases listed above for each individual health fund does not mean members of the fund can just add the associated percentage to their current premiums to determine their increase. For example, BUPA customers can’t just add 3.26% to their current health insurance cost or people with Medibank can’t just add 3.27%. These increases are just an average increase across all of the health funds policies.

To put it in perspective, with any listed health fund above, Policy A may only go up 1.24%, Policy B may go up more than 7%, and Policy C may stay the same price. In other words, despite the department of health releasing these figures nice and early this year, it really holds no bearing for people wanting to know how much the price rise is going to affect them in on April 1st, 2020 – one must simply wait for their health insurance fund to advise them of their policy increase via post or email.


Portability

Noun

Don’t re-serve waiting periods when you switch to a new health fund or policy *

“John was immediately covered for a hip replacement in private hospital because he had already served his waiting periods for joint replacements on his old policy”

* Read more about how portability works.


Why do health insurance prices keep going UP?

The annual health insurance price increase is supposed to account for regular inflation. The problem is, private health insurance has increased up to 300% higher than inflation each year since 2001. If average household wages increased the way private health insurance has in the past 20 years, we’d probably find the rising cost of health insurance insignificant. In the real world, this isn’t the case and health insurance is starting to hurt Australians to the point that more people than ever have cancelled, or considered cancelling their health insurance – particularly young Australians.

The cause of the rate increases comes from a variety of factors that include rising medical costs, the high price of private hospital accommodation for long term stays, private doctors’ bills, unregulated expensive medical devices and prosthesis, and a general lack of federal inquiry by the Government into health costing across the board. There needs to be a ceiling for the cost of medical treatment in the private system. The most obvious cause of our continuous rising premiums is the Government reducing the government rebate on private health insurance. Year by year, piece by piece, the rebate has been deconstructed down from the initial 30/35/40% full rebate that was established on July 1st 2000.

What doesn’t make sense is that the fallout of millions of insured Australians dropping out of health insurance results in a transfer of our national health bill over to Medicare. Either way the Government pays out, but with the added pain of longer waiting lists in the public health system. As of April 1st, the new rebate amounts will be:

Age ▼Base TierTier 1Tier 2Tier 3
Under 6524.808%16.539%8.268%No Rebate
65-6928.944%20.674%12.404%No Rebate
70+33.079%24.808%16.539%No Rebate

What should I do to best avoid a hefty rate rise on april 1st?


Things to aware of before making any decisions

Because of the activity and advertising going on leading up to April 1st, many health insurance companies have some impressive join offers for new members in March. Some offer 4 – 6 weeks free or some offer sizable gift cards and the like. It comes as very good advice that you should never join a health fund for the sake of a dangled carrot. Likewise, you should never stick with your current health fund if the retention team calls you and offers you a free month to stay after they become aware of your transfer to a new health insurer.

As mentioned before, any premiums paid in a lump sum before the price increase on April 1st are all charged at pre-rate rise premium. Whether you were to pay quarterly, bi-annually or for the full year, it would cost you less than paying fortnightly or monthly. This is why so many Australians simply pay for their health insurance premiums annually in February or March each year. On a couple or family policy, an annual payment made this way can save hundreds of dollars compared to paying health insurance premiums on more regular schedule. The impact may not be as significant on a single policy, but money not spent is still money saved.

Be careful when responding to marketing and advertising for online health insurance comparison companies. Most of them use automated dialler systems that are set to hound your phone up to seven times in as little as two days. At Fair Health Care Alliance, we call our customers manually and leave a voicemail, SMS or email to let you know we tried to call. We never attempt to contact our customer more than four times total, and almost never twice in one day.


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Comments (1)

what is the cost of just general extras and do i have to go through any waiting periods

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