On the 25 of January 2018, the Federal Minister for Health announced health insurance premiums are set to increase an industry weighted average of 3.95%. This means almost half of all Australians will need to fork out extra to pay for their health insurance policies after April 1.

What does this mean for me?

The specific amount in which your policy has been affected by the April rate rise depends on your health fund and your type of cover. According to the Minister of Health, on average, a single person will now pay an extra $72.80 per year for their health insurance, while a family will pay an extra $143 per year. Before the rate rise, the average cost of a family health insurance policy was around $4,040 per year. A singles policy previously sat at around $2,380 per year.

Source: “Lowest private health insurance premium changes in 17 years”, Media Release from Minister of Health, (2018).

Why should I have health insurance?

While increases might seem daunting, the value of health insurance can far outweigh any rises and falls in price. The benefits (provided you have served your waiting periods) include:

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How will I know if my premium increases?

You would have been notified in writing if your health fund increased your premium, where you would have been able to check over the updated policy information. If applicable, your fund should have also explained to you why they increased their premiums above the average rate rise.

Why did health insurance rates go up?

Before insurers can raise their premiums each year, they must submit the proposed increases to the Federal Government to ensure they’re sustainable, fair, and necessary. Some factors that lead to rate rises include:

These proposed changes are reviewed, and if the insurer can’t sufficiently justify why they need to increase their premiums, the proposal will be rejected.

As the premium rate rise is a weighted average, some health funds increase their prices more than others. This weighted average is based on changes to a health funds entire portfolio of policies; this means the cost of some policies may go up a substantial amount, some may increase slightly, and some may not go up at all. For example, in 2018 one provider raised their premiums by as much as 8.90%, whereas another raised theirs by as little as 2.28%.

For further information, take a look at Why do health insurance premiums increase every year?

A brief history of private health insurance rate rises

For over 15 years, the Department of Health has approved private health insurance rate rises. Since 2010, health insurance has increased by an industry weighted average of 54.6% in total. This means if your health cover costed $1,040 to maintain in 2010 (i.e. $20 per week), it will now cost , on average, $1,671 following the April 1 2018 increase. Take a look to see how health insurance rates have changed over the past decade.

Finding the right policy

With so many options available and differing levels of cover, it can be daunting to compare and find the most suited policy for your needs. We take the stress out of the process by offering a free health insurance comparison service, where you can easily see if there’s a better deal out there for you.

Our health insurance experts are here to help you find the value in your health insurance again. Call them today on 1800 981 019.

Year of rate rise Rate Rise (%)*
2018 3.95%
2017 4.84%
2016 5.59%
2015 6.18%
2014 6.20%
2013 5.60%
2012 5.06%
2011 5.56%
2010 5.78%
Total increase 54.6%
* Industry average, as taken from health.gov.au

So, what are you waiting for?

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