Health insurance premiums are set to increase from 1 October 2021, meaning Aussies stressed about the cost of their private health should be looking to switch to a cheaper provider in the next seven days, data reveals.
The planned health insurance hikes, which were originally paused back in April, will see some policies increase by nearly 6 per cent per year.
While it’s the lowest increase in years, it will still see the typical family policy increase by $127 per year, $140 per year for couples and $59 per year for singles, according to iSelect spokeswoman Jessie Petterd.
And higher tiers equate to bigger losses: families on a gold tier policy could be facing an extra $200 per year, Finder data revealed. That’s a hefty price, considering nearly 3 million Australians with health insurance are stressed about paying their premiums.
But according to Finder, Aussies stand to save around $700 just from switching their policy.
“Health insurance is a significant expense that could easily come into the firing line for Aussies trying to cut costs,” Sophie Walsh, insurance expert at Finder said.
“However, there are ways to reduce your premium without ditching your cover altogether.”
Walsh said rather than dropping your policy completely, you should review your cover to make sure you’re paying for the right level that suits your needs and lifestyle.
“If you’re young, fit and healthy, don’t pay for gold cover if you’re highly unlikely to need it,” she said.
And, if you opt to pay for your premium upfront for the year before the price increase comes into effect, you could lock in the current price for the next 12 months.
“And if prices do rise as usual on 1 April again next year, potentially they could skip two price hikes in 12 months,” Walsh said.
What else can I do to save money on health insurance?
While couples policies help you save on paperwork, they still cost the same as two singles policies, Finder research reveals.
“Couples may even end up paying more for their insurance than they need to if one person needs a higher level of cover,” Walsh said. In other words, ditch the couples policy.
Combined cover is also convenient, but Finder says you may be better off mix-and-matching your hospital and extras cover, because you’re likely to receive better value.
Lastly, if you opted for a gold cover policy during pregnancy, and no longer need that cover, you should review your policy and change to a lower tier.
“Opting for lower tier cover can see your premium drop significantly,” Walsh said. “Just be aware of what treatments you’ll be ditching before you make the call.”
Is private health insurance even worth it?
If you don’t have private health insurance, you’re not alone. In fact, many Aussies have been ditching health insurance due to the high out-of-pocket costs for medicines, hospital stays and specialist fees.
Over the 2017-18 financial year, Aussies spent $1,568 on average on out-of-pocket expenses – which equates to around 2.5 per cent of their average annual income.
But there are definitely pros and cons to insurance. For example, if you wear contact lenses, visit the physio often or enjoy regular dental check-ups, you might enjoy the extras benefits.
If you also want your own choice of doctor or hospital, private health insurance is also handy.
However, if you don’t mind waiting longer for elective surgery, or think you won’t get much use out of your cover, it’s likely not for you.
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