As the cost of living continues to rise, Australians are feeling the pinch in every aspect of their finances, including the realm of healthcare. For the 14.7 million Australians (just over 56 per cent) who have private health insurance, the recent notification of premium increases* is yet another financial hurdle to face.

With an average rise of 3.03 per cent, it's essential to understand not only why these costs are climbing but also how to manage them effectively without compromising your health coverage*.

Let's delve into the reasons behind these increases and explore practical strategies to keep your private health insurance costs in check*.

Understanding the Increase in Private Health Insurance Premiums

First, here is some background to the yearly price hike. The annual increase in private health insurance premiums, which takes effect every April 1st, is a response to the rising costs of providing private healthcare. Reasons such as an ageing population and more complex medical needs are said to contribute to these costs. To mitigate excessive hikes, the federal government engages in annual consultations with the health minister to set ‘reasonable’ premium rises.

In the context of the 2024 negotiations, insurers initially sought a huge 6 per cent increase, which was pared down by Health Minister Mark Butler, considering the cost-of-living crisis. However, it's crucial to note that the 3.03 per cent figure is an average, not a cap, meaning some policyholders will face even steeper increases*.

Are you paying more than you need to? Image Credit: Shutterstock

For instance, among the top five insurers*, HCF is implementing a 2.89 per cent increase, which is good news for their customers, while NIB's premiums will rise by 4.1 per cent. HBF is passing on a 3.95 per cent increase to their customers, Bupa is just behind them with a 3.61 per cent rise, and Medibank policyholders can expect a 3.31 per cent increase.

While inflation hovers around 4.1 per cent and wage growth is at 4.2 per cent, a 3.03 per cent increase might seem reasonable. However, for many Australians, especially those on fixed incomes or experiencing financial hardship, even a small increase can tip the scales*.

Strategies to Manage Rising Health Insurance Costs*

1. Review Your Coverage*: Take a close look at your current policy to determine if you're paying for coverage you don't need. For example, gold cover typically includes IVF and other reproductive services, hospital psychiatric services, and weight loss surgery. While this is fantastic for Australians with those specific needs, you might not need this type of health cover.*

2. Review Your Excess*: Consider increasing your excess to lower your premium. Remember, the excess is the amount you pay out-of-pocket for planned hospital treatments, and you can adjust it at any time. For singles, the maximum excess allowed is $750, and for couples or families, it's $1500. Just keep in mind, this, of course, means, you will have to pay more out of pocket if you do choose to adjust your excess and end up in hospital.*

3. Compare Providers*: Shop around and compare different health insurance policies. There may be more affordable options available that still meet your healthcare needs. To streamline this process, we recommend consulting a professional comparison service, like our trusted long-term partner Compare Club*.

4. Utilise Government Incentives*: We covered this in more detail in 2023, but depending on your income, maintaining private health insurance could save you from paying the Medicare Levy Surcharge at tax time. This surcharge is 2 per cent of your annual income for those without private hospital cover.

5. Seek Professional Advice*: If you're unsure about the best course of action, consider speaking to the experts at Compare Club* who could be able to help you save.

6. Take Advantage of Discounts*: Some insurers offer discounts for paying premiums annually or setting up direct debit payments. Check with your provider to see if you're eligible for any discounts.

Key Takeaways

• Private health insurance premiums in Australia have risen by an average of 3.03 per cent, the biggest increase in five years but still below the rate of inflation.
• The federal government negotiates annual premium rises with insurers, and a 6 per cent increase requested by insurers for 2024 was reduced by the Health Minister due to cost-of-living concerns.
• Policyholders may face different increases based on their insurer, with some increases aligning closely with current inflation and wage growth rates.
• Ways to manage costs include downgrading coverage or increasing your excess to reduce premiums and contacting a comparison service such as Compare Club*.

Why use a comparison service?*

Compare Club is one of our long-term partners* with whom we have personally compared health insurers! You can read about Maddie’s experience here*.

The team at Compare Club* will make sure you have the health cover you need while paying a price you’re comfortable with*.

You get the peace of mind that comes with working with trusted professionals who have the years of experience* needed to navigate the complicated health insurance system and keep you from any further confusion.

You won’t lose anything by comparing; it’s completely free, and you only stand to save*! After all, if you don’t like the quote you receive from Compare Club*, you don’t have to do anything.
While the rise in private health insurance premiums is a challenge, it's not insurmountable. By carefully reviewing your policy, adjusting your coverage, and exploring all available options*, you can find ways to manage these costs effectively.

If you have any tips or experiences to share about managing health insurance costs, or if you've found a particularly effective way to save on premiums, please share your insights in the comments below.

Disclaimer: Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

*Please note, members, that this is a sponsored article. All content of ours that has an asterisk next to it means we may get a commission to write an article or post a deal. We do this to assist with the costs of running the SDC. Thank you!

 

[Ingot]

When the Covid mandates effectively booted me on to the pension, as the sole bread winner over 30 years, we lost 70% of our income.
At the same time, we received notice that someone from Sydney had bought the unit we rented. With 3 months notice to find a place, and despite putting in 3 applications, we ran out of time.

Savings were going fast. Enough about that - many thousands of people had similar experiences ... and worse.

First thing was to ditch Private Health Insurance (PHI). We never had a claim in 25 years with AHM (formerly we were with Guardian, who were bought by AHM). In that time our premiums went from $9.80/month for a family, to around $160/month for just the two of us.

Then a family member was diagnosed with terminal bone cancer of the spine, brain, thigh bones, lung and more, and it looked pretty bad. Initial diagnosis: Terminal.

Had we gone to a private Oncologist, we'd have been up for fee excesses on our PHI claims, as well as gap fees for the private doctor.

Instead, we went to one of our major Public Hospitals.
We have had exceptional treatment there.
Radiation Oncologist and Medical Oncologist - world class.

My family member was prescribed an oral form of a drug that absolutely smashed the 9 brain tumours in 8 months. The bone cancers (world rates of cure are < 5%) are no longer spreading, and three fractured spinal vertebrae have responded to radiation treatment (no more pain) and look to be remitting.

We can only thank God that the circumstances that led us through every step of this process were laid out for us in His providence.

As a Reg Nurse, I seriously doubt we would have received as good attention and care as we have in the Public system. In fact in my experience, I know we would not have.

Now on reflection, I wonder why we ever had PHI at all.
I jave known for a long time that Extras cover is a total waste of money, unless you have 10 children with decaying teeth and all requiring spectacles.

It's no secret that Insurers bleed the public through their Extras cover rip offs.
I have a sister with 7 children (all adult now) for whom she kept PHI going through difficult years.
I could not convince her to put the money aside in savings, and see how much better off they would have been.

Just my story - long - yes ... and true.

 

[IAN3005]

The different categories are so closely linked that if you want to cancel one that you don't require you automatically cancel one you do need..... we will see what my premium jumps to and I may cancel the whole policy and save myself $2,000 dollars a year.....
The government can take care of everything.....

 

[Ingot]

The different categories are so closely linked that if you want to cancel one that you don't require you automatically cancel one you do need..... we will see what my premium jumps to and I may cancel the whole policy and save myself $2,000 dollars a year.....
The government can take care of everything.....

It's a hard one Ian.
No one can advise anyone else on this - our needs and resources are all different.
I can only say that in the years we had PHI, the services we needed were not available privately in a timely manner.

 

[Ingot]

It's a hard one Ian.
No one can advise anyone else on this - our needs and resources are all different.
I can only say that in the years we had PHI, the services we needed were not available privately in a timely manner.

Off-topic a bit ... but ...
Is Australia overdue for a decent medicare funded dental service?
I have been waiting for 14 months now to have some broken teeth and fillings replaced with the state's "free" dental service.

I do not know how to get upgraded on the list, but to do even that, I know I would be displacing more-deserving people.
I am no socialist, but surely a few more dentists need to be employed by state health to deal with the backlog?
In Tasmania dental patients pay a standard $45 co-payment for each consultation, and the waiting lists are much shorter than where I now live.

 

[IAN3005]

When the Covid mandates effectively booted me on to the pension, as the sole bread winner over 30 years, we lost 70% of our income.
At the same time, we received notice that someone from Sydney had bought the unit we rented. With 3 months notice to find a place, and despite putting in 3 applications, we ran out of time.

Savings were going fast. Enough about that - many thousands of people had similar experiences ... and worse.

First thing was to ditch Private Health Insurance (PHI). We never had a claim in 25 years with AHM (formerly we were with Guardian, who were bought by AHM). In that time our premiums went from $9.80/month for a family, to around $160/month for just the two of us.

Then a family member was diagnosed with terminal bone cancer of the spine, brain, thigh bones, lung and more, and it looked pretty bad. Initial diagnosis: Terminal.

Had we gone to a private Oncologist, we'd have been up for fee excesses on our PHI claims, as well as gap fees for the private doctor.

Instead, we went to one of our major Public Hospitals.
We have had exceptional treatment there.
Radiation Oncologist and Medical Oncologist - world class.

My family member was prescribed an oral form of a drug that absolutely smashed the 9 brain tumours in 8 months. The bone cancers (world rates of cure are < 5%) are no longer spreading, and three fractured spinal vertebrae have responded to radiation treatment (no more pain) and look to be remitting.

We can only thank God that the circumstances that led us through every step of this process were laid out for us in His providence.

As a Reg Nurse, I seriously doubt we would have received as good attention and care as we have in the Public system. In fact in my experience, I know we would not have.

Now on reflection, I wonder why we ever had PHI at all.
I jave known for a long time that Extras cover is a total waste of money, unless you have 10 children with decaying teeth and all requiring spectacles.

It's no secret that Insurers bleed the public through their Extras cover rip offs.
I have a sister with 7 children (all adult now) for whom she kept PHI going through difficult years.
I could not convince her to put the money aside in savings, and see how much better off they would have been.

Just my story - long - yes ... and true.

Make me think of ditching mine.... suffered a stoke and 3 heart attacks and not a cent of of my private health insurance was used... that's after 40 years of contribution.

d

 

[Ingot]

Hope you are doing ok now, Ian.
It's a bummer getting old - no idea what tomorrow will present to us.
I like your optimism and common sense on here - keep up the good work
And stay away from the Bingo thread - it'll drive you crazy!

 

[IAN3005]

Hope you are doing ok now, Ian.
It's a bummer getting old - no idea what tomorrow will present to us.
I like your optimism and common sense on here - keep up the good work
And stay away from the Bingo thread - it'll drive you crazy!

Thanks for your kind words....

 

[Buchanfarmer]

I had for over 50 years health insurance with LHS. They kept putting up the rates so much it was half my pension so after much discussion I said to them FOff.
Some time later I spent 6 weeks in hospital with septicaemia. My heart was screaming out about that girl that was kept by the leader opposing everything, Dutton, keeping her locked up with no medical care. Septicaemia isn’t a joke, it’s very serious take it from me.
So my health insurance was zip. Then I got this cancer. I have to thank many folk who paid for the radiation therapy, accommodation at Visard’s Houseband the care of Monica and staff. Also, the interaction with my new friends

 

[KaitlinHill]

Interesting information about the rising cost of health insurance. We need to understand the reasons for this increase and find ways to reduce costs without sacrificing health coverage. Review your services, consider increasing your deductible, compare offers from different providers, take advantage of government benefits, seek professional advice and take advantage of discounts if possible.

 

[Ingot]

Interesting information about the rising cost of health insurance. We need to understand the reasons for this increase and find ways to reduce costs without sacrificing health coverage. Review your services, consider increasing your deductible, compare offers from different providers, take advantage of government benefits, seek professional advice and take advantage of discounts if possible.

Hi KaitlinHill
I like your optimism, and desire to assist.
Can you please give examples of what you are suggesting?

Right now the rent is taking 45% of our combine pensions.
Weetbix and pasta are always a part of our bread-and-milk shopping run.

I walk instead of taking the car, as it's less than 600 m to the shopping centre.
CTP Greenslip is $305.90 due end of May, so saving for it.
Roadworthy for registration $70 at the same time

We recently cut our internet to a slower bandwidth, and have saved $15/month.

Is there anything else we can cut, as we now shower every 2nd or 3rd day to save gas, and use 40W bulbs to save power.

We donate $25/month to Foodbank. Should we stop doing that?

 

[IAN3005]

When my time comes and I need specialist treatment I will refuse and let nature take its course..... then maybe I can partake of the VAD.

 

[HukoKamb]

I’ve been in a similar situation recently. My family has also seen increases in our health insurance premiums, and it’s a real challenge to manage the extra costs.One thing that helped us was reviewing our policy details to make sure we weren’t paying for coverage we didn’t need. Sometimes, you can adjust your coverage to fit your current needs better, which can save you a bit.Another strategy is to shop around and compare different health insurance providers. You might find better deals or discounts that weren’t available before.In a similar vein, thinking about other types of insurance, like life insurance, might also help with long-term financial planning and peace of mind. Sometimes having a broader financial plan can ease the strain of these unexpected costs.