Health Insurance: The important things to get sorted before April 1 by Sophie Ryan, iSelect spokesperson .
If the last couple of years haven’t been tough enough on your budget, some households with private health insurance could soon be in for a nasty shock.
April 1st is typically the time premiums rise, but in 2022 some health funds are deferring their increases until later, while others are still going up in April.
So if you’re hunting for a job, struggling to keep up with those never-ending bills, or you simply haven’t reviewed your health cover in a while, take a moment to examine your private health insurance policy before premiums start going up.
Here are a few simple things to get sorted. Doing so might just save you some serious cash down the track!
1. Know how much more money you could be up for
The average increase of premiums this year is 2.70%, costing families an extra $125 per year on average. Singles could be shelling out an additional $58 a year on average[1].
While this year’s premium rise is the lowest in years[2], an increase is still an increase and it’s important to remember that 2.70% is an average only. Some policies will go up by more and others less. In fact, most policy holders will see their premiums go up by 3.06% on average, as the big 5 funds who make up the majority of the market are increasing their premiums by a combined average of 3.06% in 2022[3]
So get yourself up to speed. Finding out if and when your policy is increasing, and by how much, is the first thing to sort out.
2. Review your cover
Now that you know how much extra you could be up for, it’s time to check what you’re really spending all of that hard earned cash on. What policy do you have and what’s included? Consider your life stage and ask yourself if your policy still stacks up.. If your family is complete, then you could consider dropping cover for pregnancy and IVF. Young, fit and healthy? You may not need to pay for things like cardiac, cataracts or joint replacements.
Carefully comb through your extras. If you’re not using them, then there’s really no point in paying for them, right? If you only use some of them like dental or physio, think about flexible extras products, that combine your separate extras limits into a single annual limit for you to use across different services. This lets you get more back on the services you use the most.
3. Find ways to save
Now that you’ve reviewed your policy, it’s time to check out ways you could save money, or find better value. For example, you could opt for a higher excess to reduce your annual premium. Another hack to consider is pre-paying upfront for the full year before your increase takes effect. This will lock in your current rate, and help you avoid the 2022 premium increase for another 12 months.
Some funds are also offering incentives ahead of April 1st, giving you all the more reason to shop around and check if you can take advantage of the deals.
So there you have it, three things to think about and get sorted before premiums start rising. Don’t put private health insurance in the too hard basket. Comparison service iSelect* have trained consultants who can help you cut through the confusion of the 2022 health insurance rate rise. They can compare your current policy against other options from iSelect’s range of policies and providers, to see if you could save money on your health insurance, or see if there may be another policy better suited to your needs and budget.
If you do decide to switch, they’ll help you take care of the whole process, saving you time, effort and money. Yes please!
Disclaimer:
*iSelect does not compare all health insurance providers or policies in the market. The availability of policies will change from time to time. Not all policies available from its providers are compared by iSelect and due to commercial arrangements, your stated needs and circumstances, not all policies compared by iSelect are available to all customers. Some policies and special offers are available only from iSelect’s contact centre or website. Click here to view iSelect’s range of providers.
[1] Source: Based on weekly calculations included in Minister’s media release multiplied by 52 weeks to reach an annualised figure https://www.health.gov.au/ministers/the-hon-greg-hunt-mp/media/delivering-australias-lowest-private-health-insurance-premium-change-in-21-years
[2] Source: https://www.health.gov.au/ministers/the-hon-greg-hunt-mp/media/delivering-australias-lowest-private-health-insurance-premium-change-in-21-years
[3] Source: Source: Calculated as a weighted average based on the percentage of policies held in the respective funds per the APRA Operations of Private Health Insurers Annual Report data 2020-21 (https://www.apra.gov.au/operations-of-private-health-insurers-annual-report) and https://www.health.gov.au/resources/publications/average-annual-increases-in-private-health-insurance-premiums
