Health funds will be raising their rates again in April, which can prompt many consumers to think about downgrading their existing cover or dropping it altogether. Before you make any hasty decisions, you’ll be pleased to know that you are not obliged to just accept your health fund’s new rates. Here are our tips for surviving the annual rate rises!
What to Expect This Year
Insurers apply to the Health Minister to raise their premiums. In previous years, the average increase has been 5.72 per cent.
Rate rises for 2016 aren’t anticipated to be as steep as last time but nib boss, Mark Fitzgibbon, has predicted that consumers should not be surprised to see annual increases of 5 to 6 per cent for the foreseeable future.
This is in line with health care spending, which has come in at around 6 per cent in recent years. Reports have suggested that the cost of premiums could rise by as much as four times the cost of inflation but Fitzgibbon sees this as unlikely to be that high.
How to Help Yourself
If your health fund was one of those that implemented above average premium rises in 2015, you’re probably wondering whether the same will happen this year and if there is anything that you can do to negate the impact on your budget. Here are a few of the things that you can do to offset the rate rises.
It’s a good idea to compare health funds at least once every 12 months and with the rate rises just around the corner, now is the perfect opportunity to look at your options.
While some health funds have been raising their premiums in excess of the average rate rise over the last few years, others have consistently been way below it. There is therefore some good scope for finding a health fund that won’t leave you significantly out of pocket every time a rate rise occurs; just make sure that you go with one that will work well for you in terms of your cover and only use premium increases as part of your decision. In the long run, it can actually cost you more if you switch to a health fund that doesn’t cover what you really need or that includes lots of things that you don’t need.
Review Your Cover
While you’re shopping around, think about how well your cover is really working for you right now. If you’ve not had a close look at your policy recently, there is a good chance that you’re currently paying for some services that you don’t use or are unlikely to need to claim for any time soon.
You can get better value for money by switching to a policy that fits your needs and doesn’t include additional services that aren’t relevant to your circumstances. Some health funds already do this by offering policies that are aimed at particular life stages, such as excluding age related and obstetrics Hospital services for cover that is geared towards young and healthy singles that are not planning to start a family in the near future.
This is true for Extras services too, particularly with regards to annual limits. The amount that you can claim per year is different depending on your health fund, which can make a big difference if you use certain services on a fairly regular basis. Generally speaking, basic Extras policies will include popular choices such as general dental, optical and chiro but won’t have big annual limits for them. The broader Extras services tend to include a wider range of services with slightly more generous annual limits but it’s definitely worth shopping around to see what kind of Extras are included and how much you can claim for on each service.
If you know that you will be using certain Extras services quite a lot, it’s worth seeing if you can find a policy that has more generous annual limits for the ones that are most relevant to you. For example, some health funds offer unlimited general dental with no annual limits.
Pay Premiums Upfront
If your budget is flexible enough, you can “lock in” the current cost of premiums with a particular health fund – and effectively delay the impact of the upcoming rate rises for another year. The downside is that you’ll have to pay a full year’s worth of premiums upfront in or before March. Your bank will need to have processed the payment by April 1st for you to take advantage of this option.
Pay Premiums By Direct Debits
You will often get a discount of up to 4 per cent if you choose to pay your premiums by Direct Debit. A lot of health funds offer this but this won’t necessarily always be available.