Time to check health insurance cover

MORE than 13 million Australians have some form of private health insurance and face premium hikes nearly three times the rate of inflation.

The federal government has approved increases averaging 6.18 per cent and Health Minister Sussan Ley is encouraging consumers to shop around. The increase equates to about $250 a year for a family with a hospitals and extras package and about $100 for a young single, Canstar estimates. “With increases in premiums set to put more pressure on household budgets, it’s crucial that families go over their policies with a fine-tooth comb,” Canstar research manager Mitchell Watson says. THE PREMIUM INCREASE VARIES The impact of the 6.18 per cent rise will vary according to the fund, cover level and state. Ms Ley says some health funds will offer increases as low as 3.98 per cent. But online comparison service iSelect’s head of corporate affairs Matt Cuming points out that many Australians will be hit with increases well above the average. A $3,000 annual policy will rise by $185 while a $2,500 policy goes up by $154 a year. THINK ABOUT WHAT YOU NEED Canstar says consumers should restrict themselves to cover they can afford. Increasing the excess can lower premiums but Canstar advises ensuring the excess is an amount you’ll be able to find if necessary. If your family medical history shows you’re susceptible to a particular condition, make sure you’re covered for it in the future, Canstar says. COMPARE With more than 30 private health funds and many levels of cover available, the prospect of shopping around can seem daunting. There are numerous online comparison services and the government has its own independent website at www.privatehealth.gov.au. Analysis by iSelect shows the cost of like-for-like hospital cover can vary by more than $800 a year between insurers, depending on the state. DON’T SET AND FORGET iSelect says health insurance premiums have increased by three times the rate of inflation over the past decade, yet many policy holders haven’t reviewed their cover. “Being a set-and-forgetter can result in not being covered for what you need, and in many cases paying for things you don’t need,” Mr Cuming said. If you wait until after 31 to buy hospital cover, you have to pay the lifetime health cover loading on top of your premium – a two per cent loading for every year over 30. YOU CAN SWITCH HelpMeChoose says policy holders are free to switch between health funds, but should be aware of any terms and conditions that may apply. “Once someone has served a waiting period with any health fund, it should automatically transfer over to their new fund providing they’re switching to an equivalent policy,” spokeswoman Sarah Cannata said. However that may not apply if they’ve changed to higher benefits, she adds. LOOK BEYOND SMALL JOINING INCENTIVES Canstar advises consumers to look past gimmicks so they don’t pay more than they need. “We often see funds offer incentives to join, particularly in the next few months leading up to the end of the financial year, but customers need to look beyond the movie tickets or gift cards and really do their sums on whether the policy is good value for their needs,” Mr Watson says. BEAT THE PRICE HIKE Ms Cannata says consumers should consider their payment options once they’ve compared policies. “Consumers can avoid the increase by paying up to 13 months in advance, or as much as they can afford.” AVERAGE PACKAGE (HOSPITALS AND EXTRA) PREMIUMS AFTER APRIL 1 RISE: * Northern Territory: – Family $3666, up $213 – Young singles $1335, up $78 * NSW: – Family $4232, up $246 – Young singles $1771, up $103 * Queensland: – Family $4425, up $258 – Young singles $1856, up $108 * South Australia: – Family $4471, up $260 – Young singles $1783, up $104 * Tasmania: – Family $4537, up $264 – Young singles $1811, up $105 * Victoria: – Family $4539, up $264 – Young singles $1879, up $109 * Western Australia: – Family $4056, up $236 – Young singles $1780, up $104 Source: Canstar