News: The Health Insurance Premium Rate Rise |


It’s the beginning of a new year – a clean slate, an opportunity to start over, to set goals and achieve dreams. Unfortunately, the beginning of the new year also coincides with the billing cycles for most utilities providers, and let’s not mention those often overindulged Christmas credit cards. raterise1You’ve now got statements and bills piling up, and it’s likely that very soon, you’ll receive a letter from your private health insurer letting you know that your premium will be increasing. You know and understand the benefits of private health insurance, but it’s hard to take the increase in rates that come every year. The cost of living feels expensive enough already and it’s just another one to add to the pile. Perhaps you’re feeling irritated or forlorn, but also confused. Despite your insurer’s informative letter, you may still feel in the dark about health insurance premium rate rises.

The good news is that we’ve broken down all the information to help give you a better understanding of the rate rise and what it means. Keep reading to find out everything you need to know about health insurance premium rate rises.


A premium rate rise means that your insurance cover could become nominally more expensive. A rate rise means you could pay more to maintain your existing level of cover.


The premium rate rise could affect anyone who already has private health insurance or is considering investing in it. If you’re a policy holder, then you already know the importance of private health cover, regardless of the cost. If you’re only just considering private health insurance at the moment, don’t feel dismayed – the benefits of comprehensive healthcare far outweigh the costs. If you’re interested in more information, read our guide on Public vs Private Health Care.


Health insurance premiums rise when the cost of healthcare increases and insurers need to keep up with costs. Rising costs may be due to an increase in claims against insurance policies, an increase in hospital or medical costs, or inflation. Other factors associated with increasing costs may be remuneration for nurses, medical equipment costs, doctors’ and orderlies’ fees, and the offering of more complex procedures at private hospitals.

raterise2The Federal Government carefully regulates private health insurance providers and monitors their products, what they cover, and how much they cost. Each year, insurance providers reassess their policy premiums against the market. If they feel that what they charge needs to be increased to cover the growing costs of care, they can submit details of a proposed premium increase to the Federal Minister for Health who will assess their proposal. Every insurer who wants to increase the premium of any of their health insurance products is required to submit a proposal. Each proposal is reviewed based on this (fairly complex) calculation, which is why each health insurance product will have a slightly different percentage increase and why some health insurance products may not increase at all.


Your premium may increase from 1 April 2014, as per Federal Government stipulations. Your insurer will be able to provide details on the exact date that your premium amount will change. If your premium is direct debited, make sure you are aware of when this change will take place so that you can ensure you have enough funds in your designated account for the payment.

How much?

How much your premium may increase is directly related to your policy type and insurer. Because each product is assessed separately, your rate increase will be product specific. The weighted average increase across all private health insurance products reassessed for 2014 is 6.2%. As an example, the average increase would mean an additional premium of $3.86 based on a basic comprehensive family cover policy. This is less than the cost of a large takeaway coffee in most Australian cities.

What can you do?

raterise3Your health insurer is required to inform you, in writing, of any premium increase that affects your policy. If you are unsure, you can contact your insurer to find out details related directly to your level of cover.

If you’re happy with your insurer and your level of cover, you don’t need to do anything; just keep paying your premium and enjoying your life, safe in knowledge that if anything does happen medically, you’re covered. However, if you are unhappy for any reason or feel that your health fund is no longer offering value for money, this is the perfect opportunity for you to shop around and compare other health insurance policies. There are hundreds of different policies out there, so make sure you take into account your individual circumstances when looking into health insurance, and also strive to read each Policy Brochure carefully.

In the end, your choice of health insurance is a personal decision, so it’s important to select a policy that provides you with the best safety net for your unique lifestyle.


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