The diagnosis is clear: health insurance premiums set to surge

Cure your health insurance headache.

Australia is set to experience a mini baby boom over the next five years, with the birth rate expected to rise by 6.4 per cent according to data released by IBISWorld last week.

The figures are good news for a range of Australian industries including the childcare and small businesses sector, which will see revenue grow from $9 billion per year to $12 billion in 2019.

The boost to childcare will be bolstered by the $3.5 billion dedicated to reform Australia’s childcare system, as announced by the government in the Federal Budget last week.

Health insurance providers are the biggest winner, with revenue expected to surge by a massive 36 percent. IBISWorld estimates that families make up more than half of revenue generated by the health insurance industry, with this share expected to rise.

With an aging population, the government is trying to wean patients off an already stretched public health system by encouraging people to take out private health insurance.

Simply put: this means more expensive insurance premiums for consumers as demand for health insurance skyrockets.

And health insurance providers will look to be more competitive as demand spikes.

What does this mean for you now?

Every year in April you are already hit by an unwelcome health insurance premium rise – this year premiums rose by an average of 6.2 per cent – in response to rising medical costs.

Related: Reducing your tax with private health insurance

While a baby boom is still a few years away, act now to make sure you’re not hit with more nasty surprises on your health insurance.

Review your health insurance so you are getting the best deal to protect yourself from any fluctuations and changes in the market.

How you can lower your premiums

• Compare policies

A baby boom means more people expecting to have a baby will take out pregnancy insurance and health insurance for their child after the birth. If this might be you, ensure you compare policies to get the best value for money.

Look at your current level of cover and see if you can get a similar or greater cover for a better price. Waiting periods for similar or lower levels of cover transfer with you, so you won’t have to wait out the period all over again.

When it comes to getting the best deal, don't underestimate the value of calling a professional insurance comparison service. Call our specialist consultants on 1800 008 082 or use our free online comparison service to compare prices from a range of health insurance policies from leading Australian providers.

• Decide which cover is essential

Take a step back and ask yourself: why do you have private health insurance?

Is it to cover yourself in case of an emergency, are you planning on having elective surgery, or are you interested in extras cover like dental and physio?

Depending on the policy you have, you may be paying for services you don’t actually need. Make a list of the cover you want, such as hospital and ambulance, and then shop around to ensure you've got the right policy for you.

Your family circumstances change from time to time, so check what benefits your existing policy offers and consider whether you do need that level and type of coverage.

Related: Pregnancy and private health insurance

• Review your optional extras

Take stock of your optional extras such as dental, optical, acupuncture and pregnancy and decide which are most important for your current stage of life.

Health funds vary greatly on cover and rebates, so make sure your policy covers your needs yet still remains competitive on price.

• Bundle your cover

Bundling your policies may result in greater cover for a cheaper premium.

Many health funds will offer pre-packaged policies that cover you for both hospital and general treatment. If you want basic hospital cover with a more comprehensive general treatment policy, you may be able to tailor your own package.

Remember!

- Private health insurance will quite often not cover your entire hospital bill. You will have to pay the gap and this amount will vary depending on your level of cover.
- You can still access Medicare when you would like to use the public system or fear the difference may be too large to make up.
- Look at your excess options. Excess is an amount you agree to pay before health fund benefits are available. Generally, the higher your excess payment is, the lower your insurance premium will be. BUT! Be careful: before boosting your excess to a higher amount, make sure you look at all the options. If your excess is too high, you may end up in a worse financial position than paying lower excess. Read your policy carefully.

Related: Stocktake your health insurance policy

Not all health insurance police are created equal. They vary greatly, from high-end policies that cover everything, to dirt cheap policies that omit crucial things such as ambulance cover, obstetrics, and heart related procedures. It is well worth reading the small print and taking into consideration your lifestyle and health profile before deciding which policy to go for.

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