Are you paying too much for health insurance? CHOICE reveals insurers are hiking premiums beyond the average
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As we navigate the complexities of modern life, one of the most pressing concerns for many Australians is the cost of healthcare.
Private health insurance can offer peace of mind, but recent findings by consumer advocacy group CHOICE have revealed that premiums on some policies have skyrocketed, leaving many to wonder if they're paying too much for their health coverage.
The government had approved a 3.03 per cent average annual increase in health insurance premiums earlier this year, a figure that was supposed to reflect the general cost of living and inflation rates.
However, this increase, which took effect on 1 April, has been significantly exceeded by some insurers, with hikes as high as five times the approved rate for certain policies.
CHOICE’s investigation has uncovered that Australians with private health insurance are often paying 'substantially more' than the advertised 3.03 per cent price increases.
The insurers had initially requested an increase of up to 6 per cent, but this was rejected by Health Minister Mark Butler on the grounds of public interest, citing the industry's 'record profits' and the current cost-of-living pressures.
Despite this, CHOICE reported the highest increase, a staggering 17 per cent, for Australian Unity's Gold Complete Hospital, with a $750 excess in Western Australia.
CHOICE’s health insurance expert, Uta Mihm, pointed out, 'Of the over 24,400 hospital and combined hospital and extras policies in our database, only 29 policies had an increase of exactly 3.03 per cent.'
‘This means that many Australians are now paying substantially higher monthly costs for their health insurance.’
The financial strain of health insurance is not just a statistic; it's a reality for many households.
Research by comparison site Finder indicated that one in seven households has struggled to pay their health insurance bills.
With the average cost of private health insurance hovering around $160 per month for a single person, or $1,920 a year, it's no surprise that an estimated 354,000 Australians have cancelled their health cover, while about 590,000 others have switched to a different provider in search of better rates.
Even providers like HCF, which advertised a lower-than-average 3.03 per cent price increase, have specific policies that have seen significant hikes.
For example, HCF's Hospital Gold policy with $250 excess went up by 15 per cent, and HBF's Gold policyholders faced the same rise, despite the fund's average increase being 3.95 per cent.
Finder's insurance expert, Tim Bennett, said, ‘That is how an average works.’
‘Every set policy has a different set of premiums in terms of how much it costs to actually cover offer coverage for those sort of treatments.’
‘It's certainly a vicious cycle because as health insurance gets more expensive, more young people get priced out … and then as older people have more complex health needs, it gets more expensive, and the cycle starts again,’ he added.
Private Healthcare Australia's Chief Executive, Rachel David, argued that the premium increases are necessary to reflect the rising costs of healthcare and that the process for determining these prices is rigorous.
However, these increases can be a significant financial burden.
‘The process of determining those prices is incredibly rigorous,’ she said.
‘The submissions get made to the Australian Prudential Regulation Authority first, then to the Department of Health, and then they go through everything, from claims…to management expenses and operating expenses before they approve an increase.’
‘And this time, some funds were asked to submit up to three times to actually satisfy the regulators that everything they were asking for was fair.’
In a similar story, one resident experienced this spike in her annual insurance premium from $1,400 to $6,000—a 329 per cent increase.
But what was the reason behind this huge increase in her insurance premium? You can read more about the story here.
Have you experienced a significant increase in your health insurance premiums? How have you managed these costs? Share your experiences and tips in the comments below.
Private health insurance can offer peace of mind, but recent findings by consumer advocacy group CHOICE have revealed that premiums on some policies have skyrocketed, leaving many to wonder if they're paying too much for their health coverage.
The government had approved a 3.03 per cent average annual increase in health insurance premiums earlier this year, a figure that was supposed to reflect the general cost of living and inflation rates.
However, this increase, which took effect on 1 April, has been significantly exceeded by some insurers, with hikes as high as five times the approved rate for certain policies.
CHOICE reported that some insurers raised policies by quadruple. Credit: Shutterstock
CHOICE’s investigation has uncovered that Australians with private health insurance are often paying 'substantially more' than the advertised 3.03 per cent price increases.
The insurers had initially requested an increase of up to 6 per cent, but this was rejected by Health Minister Mark Butler on the grounds of public interest, citing the industry's 'record profits' and the current cost-of-living pressures.
Despite this, CHOICE reported the highest increase, a staggering 17 per cent, for Australian Unity's Gold Complete Hospital, with a $750 excess in Western Australia.
CHOICE’s health insurance expert, Uta Mihm, pointed out, 'Of the over 24,400 hospital and combined hospital and extras policies in our database, only 29 policies had an increase of exactly 3.03 per cent.'
‘This means that many Australians are now paying substantially higher monthly costs for their health insurance.’
The financial strain of health insurance is not just a statistic; it's a reality for many households.
Research by comparison site Finder indicated that one in seven households has struggled to pay their health insurance bills.
With the average cost of private health insurance hovering around $160 per month for a single person, or $1,920 a year, it's no surprise that an estimated 354,000 Australians have cancelled their health cover, while about 590,000 others have switched to a different provider in search of better rates.
Even providers like HCF, which advertised a lower-than-average 3.03 per cent price increase, have specific policies that have seen significant hikes.
For example, HCF's Hospital Gold policy with $250 excess went up by 15 per cent, and HBF's Gold policyholders faced the same rise, despite the fund's average increase being 3.95 per cent.
Finder's insurance expert, Tim Bennett, said, ‘That is how an average works.’
‘Every set policy has a different set of premiums in terms of how much it costs to actually cover offer coverage for those sort of treatments.’
‘It's certainly a vicious cycle because as health insurance gets more expensive, more young people get priced out … and then as older people have more complex health needs, it gets more expensive, and the cycle starts again,’ he added.
Private Healthcare Australia's Chief Executive, Rachel David, argued that the premium increases are necessary to reflect the rising costs of healthcare and that the process for determining these prices is rigorous.
However, these increases can be a significant financial burden.
‘The process of determining those prices is incredibly rigorous,’ she said.
‘The submissions get made to the Australian Prudential Regulation Authority first, then to the Department of Health, and then they go through everything, from claims…to management expenses and operating expenses before they approve an increase.’
‘And this time, some funds were asked to submit up to three times to actually satisfy the regulators that everything they were asking for was fair.’
In a similar story, one resident experienced this spike in her annual insurance premium from $1,400 to $6,000—a 329 per cent increase.
But what was the reason behind this huge increase in her insurance premium? You can read more about the story here.
