2018 Private Health Insurance Rate Rise
The 2018 Health Insurance Rate Rise is just around the corner and it has just been announced that premiums are going to increase by an average 3.95%; this is what you should know.
Each year on the 1st of April, health funds operating in Australia increase their premiums. The private health insurance premium increase is designed to support the increasing cost of health services. While not all of the costs are passed on to members, some are.
It’s more important to be aware of how much your specific health insurance policy or product is increasing. Your health fund is required to inform you in writing how much your particular premium is set to rise before the price increases on April 1.
When the cost of health care increases, health insurers must increase their benefits to keep you covered. And because we’re living longer, we’re claiming for more services over a longer period. These higher benefit payouts push premiums up.
It’s important to use the 2018 March period as a reminder to compare your health insurance policy with a comparative service like Health Insurance Comparison to ensure you are getting the best cover for your situation at the best price. The private health insurance industry is regulated by the Federal Government so you should feel at ease switching between funds to get the best deal for your situation.
It’s an issue that we see all too often, consumers sitting on the same policy for years, and a lot of the time they end up paying a higher premium each year for the same cover.
Let’s take a look at what you’d be paying if you sat on the same policy for three years. In 2016 the average rate increase was 5.59%, taking annual repayments from $3,157 in 2015 to $3,333 in 2016. In 2017 the average price for health insurance was $3,495, increasing by 4.84%. in 2018, rates will rise by an average of 3.95%, thereby increasing annual payments to an average of $3633.
That’s a total increase of $476 in premium for the same cover over three years. With increasing competition in the health insurance industry it’s likely that you could now find better value health insurance cover at a more competitive price.
If you haven’t reviewed your health insurance cover in the last 12 months, or your health needs have changed, March is a great time to understand what you are paying for, and what value it brings. Given the enormous breadth of policies available today, there may now be a more suitable product in the market for you… so you may also save money!
Get in touch with Health Insurance Comparison today on 1300 672 816 or enter your details below for a free comparison. We’ll help you find the best cover for your situation from our leading partners and see if we can save you some money while we are at it.
Frequently Asked Questions About Health Insurance
There are three types of health insurance in Australia. They are:
- Hospital Cover
- Extras Cover (also known as general or ancillary cover)
- Ambulance Cover
Hospital cover can ensure any unexpected surgeries, treatments or hospital stays you may require will be covered. With appropriate cover you will have the flexibility to choose your own doctor and the option of receiving treatment in a private hospital. Most hospital covers allow you to stay in a private room. One other perk is skipping the public hospital systems’ waiting list, which can be lengthy for non emergency treatment.
Extras cover pays benefits for a a range of services, often including treatments and procedures related to the fullowing:
- Dental/oral health
- Glasses and contact lenses
- Remedial massage
- Hearing aids
- Travel vaccinations
Ambulance cover, as the name suggests, will cover you should you require emergency ambulance transport. In an emergency, there is enough to worry about. Having the expenses covered for provides security and peace of mind. Many hospital covers include emergency ambulance transport If yours doesn’t, you will need to shop for this separately.
Life is unpredictable. You never know when you might need cover. No matter what life stage you’re in, there’s a policy out there for everyone. You can select as much or as little cover as you want, depending on your health needs and requirements. It’s a small price to pay for the peace of mind health cover provides.
There is no one answer here. Costs vary across providers and policy types. Just because a policy is cheap, that does not mean it is ‘value for money’ and vise versa. Make sure you check what’s included and excluded in a policy before signing up, as you want to purchase a policy that best fits your specific needs.
Premium: A premium is the price you pay for your insurance policy (it may be paid annually or on an ongoing basis).
Policy: An insurance plan. In other words, it is the type of insurance you choose to select.
Policy Holder: The owner, or ‘holder’ of a policy.
Claim: In the event that you require treatment for a service covered by your policy, you can lodge a claim for reimbursement of all or part of the cost of that treatment.. These days, most claims are submitted electronically by the health care provider (dentist, physio etc)
Lifetime Health Cover: Lifetime Health Cover was put in place to encourage young Australians to seek out and maintain ownership of private health insurance early in their lives. If you do not take out a policy before you turn 31, extra charges will be applied should you take out a policy at a later time.
This means you will pay a 2% loading on top of your premium for every year that passes after you turn 30. For example, if you take out a policy for the first time at age 32, you will be charged 4% of your premium as an extra, then at age 40, 20% and so on, up to a maximum loading of 70%.
The loading is payable for 10 consecutive years of cover - after which it is removed and you premiums will be reduced.
Pharmaceutical Benefits Scheme (PBS): Medicare offers assistance for Australians with many of their their prescribed medication costs through the PBS. This assistance is in the form of subsidies towards the cost of many medications. You can check if your prescribed medication is on the list of subsidised items here.
Medicare Levy Surcharge: The Medicare Levy Surcharge is an additional charge (tax) applied to single Australian taxpayers who earn over the income threshold of $90,000 per year, or families/couples who earn over $180,000 per year. This surcharge is only applied to those who choose not to have a private health insurance policy.
The surcharge is designed to reduce pressure on the public health system by encouraging those with higher incomes to invest in private health cover.
Private Health Insurance Rebate: The government’s Private Health Insurance rebate lowers premiums for most Australians with private health insurance Older Australians may enjoy an even higher rebate. Our calculator can help you estimate the Government health insurance rebate you may receive.
Disclaimer: The above information is correct and current at the time of publication
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