Act now to save on health cover
The federal government has announced that the average premium hike of 2.7% is the lowest in 20 years. But that doesn’t tell the full picture. With inflation sitting at just 0.9%, private health cover is still a fast-growing household expense.
Moreover, you could be slugged by considerably more than the average rise. Seven health funds including big names like NIB, are raising premiums by more than 4%. In fact, only a handful of funds have kept their premium increases below the market average including St Lukes (0.5%), Health.com.au (0.83%) and HBF (0.94%).
Despite the extra expense, a Finder survey shows that two in five health fund members have done nothing at all to save on their cover. That’s 4.6 million people who could be missing out on savings. Yet there are ways to beat – or at least minimise, the annual premium rise.
Among those fund members who have taken steps to rein in the cost of cover, one in five have paid a year’s worth of premiums upfront. This will lock in premiums at pre-April prices though it’s more of a delaying tactic – it only puts off higher premiums for another 12 moths. And of course, not everyone has the spare cash to pay the annual cost in one hit.
The most popular step is to choose a more basic policy. It’s something one in four fund members have done, though it does bring risks.
When it comes to health cover, you need to be sure you have a policy that reflects your needs. You may discover too late – at claim time – that you’ve gone a little too hard with the cost-cutting scalpel.
Only 10% of people regularly switch health care funds. And while it can be a hassle, it’s always worth checking if you could get more affordable cover elsewhere. With over 30 insurers and hundreds of different policies to choose from, the task of comparing between insurers can seem overwhelming.
A simple solution is to head to privatehealth.gov.au, and click on ‘Compare Policies’. It’s a quick way to see if you could save on premiums, and know which fund offers the best deal for your needs.
The key point is to take early action. The longer we delay switching to a more affordable product or service, the less we feel the sting of a higher price. That makes it more likely we just put up with the situation and keep forking out more until next year rolls around.