By Laura Crowden, iSelect spokeswoman
Health insurance premiums are set to go up but there are still ways you can save money and have the right cover.
Just when you think 2020 has run out of curve-balls, it turns out some health insurance premiums are set to go up again. Yikes. But don’t panic. Switching can save you money.
Didn’t they go up already this year? Well no, they didn’t. They were due to increase on April 1st – like they do every year – but at the very last minute the health funds decided to defer the premium increase for at least six months to help ease the financial pressure due to COVID-19.
Fast forward six months and now many health funds have planned that their postponed 2020 premium increase will go ahead after all, but on October 1st.
Not exactly great news, especially when so many are under significant financial pressure due to reduced income or loss of employment.
So if you do have private health insurance, what should you keep in mind ahead of this out-of-cycle health insurance premium increase on October 1st?
Not all policies are going up and some will go up more than others
While many funds are planning on increasing premiums on October 1st, a handful of funds (including HBF, AIA and health.com.au) have decided not to, which is great news for their members. Other funds (including Bupa & NIB) are waiving the premium increase for any current members presently on JobSeeker or JobKeeper.
If your fund is set to increase premiums on October 1st, exactly how much depends on the individual policy, with some set to go up by more than others. Make sure you find out if your policy is set to increase, and if so, by how much.
While your fund should notify you of any planned increase, many are simply using portal or app notifications which can be easy to miss. Check with your fund to avoid an unexpected increase hitting your bank account in October.
Switch don’t ditch!
It’s understandable that many young Aussies will be questioning the value of private cover, especially given the restrictions on elective surgeries and many extras services due to COVID-19.
But a health crisis like the one we’re experiencing is a good reminder of how important quality healthcare can be. The peace of mind private hospital cover provides is arguably more valuable than ever.
If you are looking for ways to cut back expenses and save money, shop around to see if you could find a similar level of cover for a cheaper price with a different provider.
Switching is often easier than you think and can be time well spent. In a recent survey by iSelect, 43% of those surveyed said they saved by switching.
Review your cover for ways to save
When money is tight, it’s important you aren’t paying for anything you don’t need. Take a close look at your policy and look for ways to save.
It may be that you could drop extras cover for a while to bring down your premiums, or separate your hospital and extras cover between two different providers.
You could even look to downgrade your level of cover – even just temporarily – until your finances recover (just make sure you understand what you are no longer covered for and any applicable waiting periods).
Downgrading may be a better option that cancelling, because if you do drop private cover altogether, depending on your age, you could be stung with higher premiums if you decide to take it out again down the track due to lifetime health cover (LHC) loading.
You could pay an additional tax via the Medicare Levy Surcharge (MLS) if you are a higher income earner and you drop your hospital cover.
Another way to bring down the cost of your premiums and free up some spare cash is to opt for a higher excess.
If you think you are unlikely to be admitted into hospital in the future, then opting for a $750 excess could save you up to $200 a year. And don’t forget, some funds offer up to 10% off for customers aged under 30.
Don’t be afraid to ask your fund for help
If you are struggling financially as a result of COVID-19, don’t hesitate to ask your fund what hardship support they may have available. Many funds are offering premium relief to customers experiencing financial hardship due to COVID-19, such as policy suspension or waiving premiums for up to six months however waiting periods may apply.
The different hardship options available vary between funds and may depend on how long you have held your policy for so it’s important to contact your fund for more information.
No one likes a price increase, especially when it’s unexpected. If you have private health insurance, now is the time to get on the front foot and see if you can save money by switching before prices go up on October 1st.
And if the thought of comparing from a range of health funds makes you cringe, then give iSelect a call and get one of their trained health consultants to do the hard work for you. Adulting via outsourcing – winning!
Disclaimer: iSelect does not compare all providers or policies in the market and not all policies or special offers are available at all times, through all channels or in all areas. Not all policies available from our providers are compared by iSelect and due to commercial arrangements and customer circumstances, not all policies compared by iSelect are available to all customers. View our full range of providers via our website: https://www.iselect.com.au/partners/
