The Federal Government recently announced a 3.03% industry average increase in private health insurance premiums. This increase will take effect from April 1 and will vary between insurance providers and individual policies. Some households could end up paying hundreds of dollars more per year for their private health insurance. As your accountant, it is important to keep our clients and visitors to our website informed about how changes like this may affect them.
At Tribel, our goal is to increase the provision of holistic and comprehensive financial solutions to our clients, covering all aspects of their financial wellness. One of the areas that we have identified as an opportunity for improvement is health insurance.
To prepare for this when advising clients, our team recently went through a detailed review of each of their own individual private health providers with some surprising results. Before doing this though, it’s important to understand some of the key areas when assessing your private health coverage.
Why do premiums increase?
Premium increases are not a cash grab from insurance companies, but rather a necessity for healthcare professionals to continue providing services of the highest quality. Factors such as doctor fees, the cost of medical equipment, the increased cost of hospital procedures, wages of health professionals, and many more, are considered when increasing health insurance premiums. All health insurers are required to submit details of their proposed premium increases to the Department of Health for assessment, and the Department of Health, along with the Australian Prudential Regulation Authority (APRA), considers a range of factors before applications are passed on to the Health Minister for final approval.
What can you do?
With lengthy public waitlists for elective surgeries and high costs for many out-of-hospital appointments such as dental and physiotherapy, it is advised that instead of ditching their health insurance, Australians should consider switching to a policy that is more suitable for their needs. You can do this by considering removing services that are not important to you and switching to a policy that still provides all the inclusions you need, without paying for ones you don’t. Some funds are increasing rates much higher than others, so it is a good time to ensure that you are not paying more for your cover then you have to.
It is also important to look for offers and perks. Around the time when health insurers review their premiums, we often see a lot of perks, incentives, and promotions offered to ‘sweeten the deal’ and encourage people to switch. For example, some providers may waive some or all, of their waiting periods, give you free coverage for a limited time or offer other initiatives such as access to wellbeing and rewards programs. These perks can vary between providers, which is why it’s important to compare.
Keep in mind that a cheaper policy may not be the best value. Lower premiums can come at the sacrifice of fewer inclusions. Decide what coverage is most important to you and choose a policy that caters to these needs. Don’t waste your money on what you don’t need. More comprehensive policies will typically include a wider range of inclusions, but keep in mind this comes at the cost of higher premiums. If your health circumstances have changed, you may be able to snag a better deal by switching to a lower level of cover that still includes the things you need.
Another handy thing to know is that you don’t need to serve waiting periods again. If you switch policies, your new fund will recognise any waiting periods you’ve already served with your previous fund. However, you’ll still need to wait for any new or upgraded services and benefits. Always read the terms and conditions carefully if you’re considering switching or taking out a new policy. All the details, including inclusions, exclusions, waiting periods, excess amounts, and more, will be found in your policy brochure.
Conclusion
In summary, it is important to reassess your existing health insurance cover and compare it with other options to ensure that you are not paying more than you need to. Consider switching to a policy that is more suitable for your needs and provides the coverage you require at a lower cost. Look for offers and perks, and make sure to read the terms and conditions carefully before making a decision.
If you would like to know more, please reach out to one of our Tribel team who would be happy to share their experience.
