How Much is Your Health Insurance Premium Increasing?

Published: March 8, 2019

Private health insurance premiums rise every year on the 1st of April. For many Australians, this means health cover is becoming unaffordable, which results in them dropping non-essential cover options, switching health funds or cancelling their policy altogether.

If you have private health cover, chances are you’ve received a letter informing you of your premium increase. However, health funds do not increase their prices by the same percentage, and you are free to shop around and switch policies whenever you want.

If you’re wondering whether your health insurance policy is still worth the price you’re paying, then it might be time to shop around and compare quotes to determine if you’re still getting the best deal for your current budget and requirements.

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The average health insurance premium increase for 2019

Health insurance premiums will rise by an average of 3.25% from the 1st of April 2019. However, the percentage increase you can expect depends on the cover type and the particulate health fund you are insured with. Your insurer will inform you in writing of the exact premium rise you can expect before April 1.

Of the 10 largest health funds in Australia, HBF showed the lowest premium rise with only a 1.94% increase, while Defence Health is reporting the highest price increase with 4.50%. However, even though some health funds might have higher premium increases, their overall policy might still be cheaper compared to another insurer with a lower percentage increase.

Below are the 2019 private health insurance increases for some of the funds available in Australia.

April 2019 Health insurance premium increases

Health fund 2019 Percentage premium increase
Medibank 3.30%
Bupa 2.99%
HCF 3.20%
Nib 3.38%
HBF 1.94%
Australian Unity 3.35%
Teachers Health 3.94%
GMHBA 3.31%
Defence Health 4.50%
CBHS 3.68%
HIF 4.77%
Latrobe 3.85%
Latrobe 3.85%
Westfund 1.64%
TUH 3.18%
CUA Health 4.19%
Health Partners 3.18%
Health.com.au 3.96%
Peoplecare 4.90%
Doctor’s Health Fund 2.94%
myOwn 4.45%
Navy Health 3.62%
Nurses & Midwives 5.91%
Policy Health 3.58%
Source: Australian Government Department of Health (December 2018).

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Is private health insurance still worth it?

Whether private health insurance is worth it for you or not is a personal decision only you can make and should be based on your health, stage of life and budget. Private health insurance might be worth it for you if you want to choose your doctor, be treated as a private patient in a public or private hospital, possibly reduce waiting times for surgeries and need various out-of-hospital treatments, like physio, optical and dental.

With levies, surcharges and rebates it is difficult to determine the actual cost and value of your private health insurance policy. You need to consider your circumstances, requirements and what you're able to afford.

How to determine if your health plan is still providing value

  1. Assess you and your family’s health cover needs at your current stage of life.
  2. Choose the type of cover you want:
  3. Request quotes and speak to a specialist.
  4. Compare and review similar products from a variety of funds.
  5. Decide to either stay with your current fund and downgrade your policy or switch to another insurer offering the same or better coverage at a lower price.

Important: Before choosing a health insurance policy, always read your Standard Information Statement (SIS) to make sure you are clear on the benefits, limits and restrictions that apply.

Review different health insurance policies

What is the average cost of a health insurance policy?

The health insurance premium you can expect to pay will depend on the fund you choose, the type and level of cover you select (Hospital only, Extras only or Combined), and the state you live in.

When comparing the average premiums and their respective increases, you should consider the overall benefits offered and the policy's annual limits. For example, one company may have a higher premium increase than another, but they might provide more generous benefits or have an overall more affordable product price.

What causes health insurance premiums to increase?

  • Increase medical and health-related costs.
  • The rising cost of pharmaceuticals.
  • The rise of chronic illnesses within the Australian population.
  • Increase in health insurance claims.
  • Upsurge of Australia's ageing population who need more medical and surgical care.
  • Many younger Australians are abandoning the private sector.
  • More complex and costly medical procedures being required.
  • The growing need for innovative technologies and the increased cost of new medical equipment.
  • Increase in doctor’s charges, nurses’ wages and hospital staff salaries.
  • The health insurer having initially under-priced their policies.

While health insurers generally keep reserves to cover unexpected increases in salaries and equipment, if such increases persist then they have no choice but to submit a rise in health insurance premiums or risk financial instability. If premiums never increase, then these health funds would not be able to provide excellent value insurance and keep up with the populations growing demands for high-quality healthcare.

Government changes possibly contributing to premium hikes

The government recently released new health insurance rules designed to provide clarity on what's covered by funds. These guidelines stipulate what procedures and treatments must be included in each level of Hospital cover (Gold, Silver, Bronze and Basic) and might be another reason for the rise in average health insurance premiums.

Average private health insurance premiums increase from 2010 to 2019

Source: Australian Government Department of Health

Even though the price of health insurance goes up annually, this year has been the lowest increase we’ve seen in almost a decade.

6 Ways you can lower your health insurance premiums

Unexpected illnesses and accidents can happen to anyone, no matter how healthy you are. So, if you want to keep your health insurance affordable then there are some things you can do:

  • 1
    Review your current Hospital and/or Extras cover and check what benefits you no longer need and whether your level of cover is still relevant to your current lifestyle. Take note, if you want to avoid the Medicare Levy Surcharge and maintain your Lifetime Health Cover status, you need to have a Hospital policy.
  • 2
    Benefit from an ultra-competitive industry. Health funds have to continually improve their prices and offerings to retain customers and gain new ones. With a bit of research, you can find all sorts of discounts, bonus deals and refer friend incentives.
  • 3
    Lock in your premiums when you are paying annually and skip the April premium increases altogether.
  • 4
    Consider paying a higher excess or co-payment to reduce your premium.
  • 5
    You can potentially save hundreds when employed in a relevant industry and applying to an industry health fund, for example, Teachers Health and Doctors Health Fund.
  • 6
    Compare policies and shop around for a fund that offers cheap premium, while still providing you with a level of cover suited to you and your family's requirements.

Frequently asked questions and answers

When do health insurance premiums increase?

In Australia, private health fund prices rise on the 1st of April, every year. If your health insurance price increases, your health fund is required to notify you in writing with an update on the rates and changes you can expect. If the percentage is higher than the average, then your fund should demonstrate how the rise is necessary to cover the benefits offered in your policy.

What determines health insurance premiums?

The premium you’ll pay for a health insurance policy is generally determined by your choice of health fund, the policy type (Hospital, Extras or Combined) you want and the level of coverage you’ve selected. The state you live in will also have an impact on the price of your premium.

Does health insurance premium increase with age?

No. Your age does not affect what you'll pay for a private health insurance policy. However, a senior person that needs additional medical care might require a plan that includes a broader range of treatments and services with higher benefits, which will cost more than a basic policy that only covers the essentials.

Does claiming on health insurance increase the premium?

No. When you claim benefits, your annual limit (the benefit amount you can claim each year) will reduce by the benefit amount your insurer pays. This limit differs depending on the level of cover you choose and the health insurer you’re with.

Will my insurance premiums lower if I increase my excess amount?

Yes, if you have a Hospital policy and you choose a higher excess (the amount you're willing to pay upfront each time you go to the hospital), then your premiums will generally be lower than if you had chosen a smaller or nil excess amount.

Will my premium change if I move interstate?

Moving from one state in Australia to another might result in your health insurance premium going up or down depending on where you're moving to. It's vital that you contact your health fund and inform them of your address change, this also gives them the opportunity to help you with any coverage adjustments you might need.

How do I switch health funds?

If you’re switching to another insurer, they’ll generally take care of the transfer proceedings for you, however, you might have to request a clearance certificate from your old fund. You should generally first apply for cover from the new fund before cancelling your current policy.

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