(Australian Associated Press)
If you’ve got private health cover, you are almost due for your annual whack over the head with a premium hike.
But regular premium rises are nothing new and if you’ve had a policy for while perhaps you may have even planned for the inevitable increase.
If your policy is with one of the country’s largest insurers Medibank Private or Bupa, which control more than half the market, your premiums will be over 40 per cent higher than back in 2010.
From April 1, premiums will climb by an average of 4.8 per cent.
Medibank and Bupa are increasing premiums by an average of 4.60 and 4.90 per cent, respectively.
It’s important to remember these figures are averages only and you should contact your insurer to check the price jump for your policy.
You may have had private health insurance for a while, because it seemed like something responsible adults do, but now, perhaps, are starting to question whether you’re getting bang for your buck or if it’s a waste of money.
The key thing to consider before deciding whether to buy, ditch or switch is why you want private health insurance.
Although policies often bundle hospital and extras cover together, tax incentives are only tied to hospital insurance. You can ditch your extras and suffer no tax penalty.
Consumer advocacy group CHOICE spokesman Tom Godfrey says you can save up to 45 per cent off your premium if you drop extras.
He suggests asking your insurer to send you an annual claim statement, which should indicate how much you paid in premiums versus what you received in benefits.
“If you take out extras insurance and only use it to go to the dentist twice a year, chances are you are not getting great value,” Mr Godfrey said.
He said that when premiums rise people are often tempted to drop their level of hospital cover, which can leave them with what is essentially a junk policy that doesn’t cover common treatments like stroke, heart disease and cancer.
“If you can afford it, get a top level cover hospital policy with an excess or co-payment – don’t be tempted to downgrade,” Mr Godfrey said.
If you want to change health funds, ensure you understand any waiting periods that must be served before you can claim and remember to cancel any direct debits with your old fund.
Your old fund should provide you with a clearance certificate when you leave.
AVERAGE PREMIUM RISES FOR AUSTRALIA’S TOP FIVE HEALTH FUNDS
HBF – 5.96 per cent
Bupa – 4.90 per cent
Medibank Private – 4.60 per cent
NIB 4.48 per cent
HCF – 3.65 per cent
* Average premium increases for Australia’s top five health funds as per market share. Top five insurers control almost three quarters of the market. Premium increases effective April 1, 2017. Source: Department of Health.