The increase usually takes effect on 1 April each year. However, a number of Health Insurers have deferred their increases to later into 2022.
Some of these Health Insurers include well-known brands such as HCF (postponed to 1 November 2022), AHM, Medibank, and NIB (postponed to 1 September 2022), and GMHBA (postponed to 1 October 2022). This is great news for existing members.
Assumptions: Single policy cost of $1,288 per annum or family policy cost of $2,568 per annum increasing annually from 2012 to 2022 by the industry weighted average increases published by the Department of Health here. Prices do not include any Australian Government Rebate for private health insurance.
As the cost of health care services increase, health insurers must increase their benefits to keep you covered. Another reason premiums rise is due to the consumption of health care services. If members have an increase in the use of health care services, then health insurers need to increase their costs to ensure they can keep providing these benefits to you as a member.
The Private Health Insurance Act 2007 requires health funds to submit details of proposed premium increases to the Minister for Health before they can increase premiums on any of their policies. Funds must provide detailed financial information as well as cost and benefit projections to justify their proposed premium increase.
Your health fund must notify you in writing if your premium will be increasing. So when you receive your letter from your health insurer, be sure to go through it and understand the changes and premium increase.
It’s dependent on your financial situation and whether you are comfortable paying a higher premium for the same policy. In the above example – if you had taken a family policy out in 2010 you would have paid $2,433 per annum. Assuming you never changed your cover and it increased in line with the industry weighted average premium increases, then that same policy would cost you $4,145 per annum in 2022. That’s a total increase of $1,712 for the same cover over twelve years. With increasing competition in the health insurance industry, it’s possible that you could find better value cover at a more competitive price.
Understanding the complexities of private health insurance as well as the rate rise can be confusing and extremely time consuming. With thousands of products in the market, it can be hard for you to find the cover that best suits your needs. With access to a number of leading funds and hundreds of health insurance policies, Choosewell can take the hassle out of your search and assist you in finding the best cover for your needs.Request a Review