The fresh cost of living blow every Australian paying for private health insurance needs to know about
Australians forking out for the highest level of private health insurance cover are facing double-digit hikes to their premiums.
Health Minister Mark Butler this year approved a 3.73 per cent average increase in private health care premiums, that came into effect on April 1.
But Australians seeking gold cover have been dealt a major cost of living blow with average, annual hospital insurance soaring by 13.8 per cent, or more than three times the government-approved average increase, a Canstar analysis showed.
This equates to $442 extra a year for individuals, who are now paying $3,653 a year for the top-tier cover, which typically includes in-hospital procedures listed on the Medicare Benefits Schedule and ambulance cover.
Canstar data insights director Sally Tindall said private health insurers were legally allowed to hike their premiums by double-digit figures.
'The government-approved 3.73 per cent premium price rise was always just an average, not a cap,' she said.
'What we can now see is that some policies have risen by up to 13.8 per cent – particularly for those with the top level of cover.
'The reality is, Australians who have the top level of cover have been hit with the highest price hikes.'
Canstar calculations showed an individual with gold cover could save $1,296 a year, and slash their annual bill by a third to $2,357 by switching from an average to the lowest-priced product.
A family with gold cover could save $2,493 a year, also slashing their annual bill by a third, by switching from an average to a lower-priced product.
This would see their annual bill fall from $7,207 to $4,714.
'If you haven't done a health check on your policy since the April price rise, now is the time to do one,' Ms Tindall said.
'Find out exactly how your premium sits against the lower-cost insurers and if there's a cheaper option for the same level of cover, consider making a switch.'
Switching to the same cover could also eliminate the long waiting periods to get coverage for elective surgery.
'What a lot of people don't realise is that if you are switching to the exact same level of hospital cover, you will not have to re-serve any additional waiting periods, which minimises the risk,' she said.
Private health insurance costs increased by 4.7 per cent for silver cover.
This worked out at an extra $83 a year, or $1,838 overall, for a premium product without birth-related services.
But the increases were much more moderate for lower levels of cover.
Bronze saw a small 1.5 per cent increase, with the $20 annual change taking premium costs to $1,336 for a product offering hospital cover but not benefits for those with children.
Basic cover in fact fell by 0.6 per cent or $7 to $1,070, with this product catering to younger, healthier people offering coverage for accidents.
While headline inflation has moderated to 2.4 per cent, overall health care costs rose by 4.1 per cent in the year to March.
More than half of Australia's 27.3million people are covered by private health insurance, either individually or as part of a family package.
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