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Zoe Bingley-Pullin Zoe Bingley-Pullin

Avoid health price hike by paying early:

CHOICE suggests a way of avoiding the price hike in health insurance due on April 1st.
By Motherpedia
Date: March 05 2015
Editor Rating:

With health insurance premiums expected to increase by an average of 6.2% on April 1, consumer advocacy group, CHOICE, is recommending that consumers with private health insurance prepay next financial year's premiums. 

“Your best option is to prepay now, and if you want to save even more, some funds give you a discount of up to a 4% for paying annually. This means that you can save up to 10% on average off your premium if you pay before the April 1 increase,” says CHOICE spokesperson Tom Godfrey.

This latest slug comes in the wake of last year's increase of 6.2% and a cumulative increase of about 35% since 2010. Recent CHOICE research also shows that health and medical costs are one of the top cost-of-living concerns for consumers.

“It’s also worth checking to see if your industry offers a restricted membership fund as their full-cover policies can be substantially cheaper than open funds. Families and former employees are also eligible.”

Mr Godfrey says the news is worse for singles and families.

"These two groups have been slowly losing value under the health insurance ‘30% rebate’. As the premium increase is above inflation, last year the rebate was only 29% and this year it will be even less for singles earning up to $90,000 and couples and families earning up to $180,000.”

“It’s important to ask yourself why you have private health insurance. Is it for tax purposes or planned hospital visits, emergencies or dental and optical expenses? Knowing what you want from your cover can save you a lot of money.”

“While some consumers switch to cheaper basic private insurance policies which allows them to avoid the Medicare levy surcharge and lifetime health cover surcharges, increasing the excess on a top cover policy can be better value as you save on the premium and will still be covered if you need to go to hospital.”

“If you are considering extras cover it’s worthwhile checking to ensure the benefits you receive are at least as much as the premium you pay, as some policies are pretty poor value.”

Health insurance saving tips:

  • Pay your annual premium before March 31 
  • Consider increasing your excess
  • Pay by direct debit 
  • Ask yourself if you really need extras cover
  • Check to see if you can join a restricted membership health fund.
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