Private health insurance premiums to rise on April 1
PRIVATE health insurance premiums are set to rise by an average of almost 6 per cent this week and a new poll shows more than half a million Australians plan to leave their insurer as a result.
Premium increases will vary from almost 9 per cent to just less than 4 per cent on April 1 following a protracted back and forth between federal Health Minister Sussan Ley and insurers.
The average 5.59 per cent increase will equate to an extra $200 a year for a family policy or $100 for singles.
A Galaxy poll commissioned by health insurance comparison service iSelect found that about 530,000 Australians would drop their policy when the increase came into effect on Friday.
Another 2 million are predicted to take no action at all.
iSelect spokeswoman Laura Crowden said the increases should serve as a catalyst for policyholders to review their cover.
“What is particularly concerning is that couples and families who already have hospital-only or extras-only policies indicate they are more likely to cancel their cover together,” she said.
“It’s possible these households have already pared back their cover as premiums have risen in recent years but this latest increase may be the tipping point that means they can simply no longer afford it.
“Rather than dropping or downgrading cover instinctively, it’s vital that policy holders use the premium rise announcement as an impetus to review their policy and compare it with what’s out there.”
The Australian Medical Association released a report card warning policyholders away from “junk” policies in preparation for Friday’s price hike.
The peak doctors’ body found that many popular policies provided only minimal cover and warned consumers to read the fine print if changing funds after April 1.
Labor has accused the federal government of signing off on a dud deal for consumers, but Ms Ley countered that the premium rises were at a four-year low.