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No April Fooling (sorry – couldn’t resist 🙂 ). Health insurance premiums will rise by 5.6% on average from 1st April, 2016.

Not all funds are raising rates equally though. Rate rises vary from 3.76% to 8.95%.

To see how much your fund will raise premiums, have a look at the list at the bottom of this article.

So is there anything you can do about it? Yes, there is. Start by making sure you’re only paying for the cover you need, by choosing the right level of cover.

It would be a mistake, however, to choose less cover than you really need in order to lower your premium, so before you compromise on your protection, here are some other things you can do to minimise premiums:

  • You can lower the premium on your private health policy by opting to pay a higher excess. This is the amount of you would pay per hospital admission before health fund benefits are payable. Be aware though, if you choose an excess with a one off payment of $500 or more ($1000 for couples and families) you may incur the Medicare Levy Surcharge.
  • Co-payments are another way of reducing premiums and are very similar to excesses except that you agree to pay an agreed amount per day/night each time a service is provided.
  • Shop around – fortunately there are lots of comparison sites to help you, including;
  • look out for discounts offered to people who:pay their premiums at least three months in advance, or by payroll deduction, or automatic transfer
    • have agreed to communicate with the private health insurer (and make claims) by electronic means,
    • belong to a contribution group (e.g. your health insurance is organised through your employer)
    • are a pensioner or a low income earner in NSW or ACT (your premium may be reduced because you are entitled to free ambulance cover).
  • Pay a year’s premium before April to lock in current rates before the price rise. Premium increases usually happen around the beginning of April, so if you can afford to pay a year’s premium before April, you save on the rate rise.

 

Two more things to remember

1. If you fall more than two months behind in paying your contributions, your private insurance will lapse and you will not be insured. When you resume your payments, some insurers may re-impose waiting periods before you can claim benefits again.

2. As with all insurance, you have a duty of disclosure –  if you fail to disclose something material, you may find yourself uninsured. So if in doubt, disclose it.
 

What are your thoughts

Are you thinking of taking up cover for the first time, or of switching cover? Is there anything else you’d like to know about health insurance?

Join the conversation — leave a comment below and let us know what you’re thoughts are.
 
As promised, here’s the list of average rate rises by fund….

Insurer
Average Increase with rate protection
ACA Health Benefits Fund Ltd
6.19%
Australian Unity Health Ltd
5.05%
BUPA Australia Pty Ltd
5.69%
CBHS Health Fund Ltd
5.92%
Cessnock District Health Benefits Fund Ltd
6.19%
CUA Health Fund Ltd
8.95%
Defence Health Ltd
5.48%
Doctor’s Health Fund Pty Ltd, The
3.76%
GMHBA Ltd
5.44%
Grand United Corporate Health Ltd
4.26%
HBF Health Ltd
4.94%
Health Care Insurance Ltd
6.90%
Health Insurance Fund of Australia Ltd
6.55%
Health Partners Ltd
7.14%
Health.com.au Pty Ltd
8.81%
Hospitals Contribution Fund of Australia Ltd, The
5.42%
Latrobe Health Services Ltd
5.52%
Lysaght Peoplecare Ltd
4.38%
Medibank Private Ltd
5.64%
Mildura District Hospital Fund Ltd
6.74%
National Health Benefits Australia Pty Ltd
5.28%
Navy Health Ltd
5.50%
NIB Health Funds Ltd
5.55%
Phoenix Health Fund Ltd
5.72%
Police Health Ltd
4.81%
Queensland Country Health Fund Ltd
4.91%
Queensland Teachers’ Union Health Fund Ltd
7.15%
Railway & Transport Health Fund Ltd
5.61%
Reserve Bank Health Society Ltd
5.37%
St Luke’s Medical & Hospital Benefits Association Ltd
5.89%
Teachers Federation Health Ltd
4.97%
Transport Health Pty Ltd
6.49%
Westfund Ltd
5.94%
INDUSTRY WEIGHTED AVERAGE
5.59%

 

MIND THE WAIT

You will have to serve a waiting period when you start a new policy (or increase your level of cover).

The maximum waiting periods that funds can impose for hospital treatment are: 12 months for pre-existing conditions and obstetrics (pregnancy), two months for psychiatric care, rehabilitation or palliative care (even for pre-existing conditions), and two months in all other circumstances. Waiting periods for general treatment (ancillary or extras) cover are set by individual health funds.

This is an update of an article we published last year about reducing health fund premiums.