Avoid Double Whammy: Tips to Lower Private Health Premiums

As private health insurance premiums in Australia are set to increase from April 1, many policyholders face a double blow as the rebate for these premiums is also decreasing. This year’s premium hike, averaging 3.73%, is the highest since 2018, with some major insurers like Bupa, HCF, Medibank, and NIB raising rates even more significantly. Police Health premiums are skyrocketing by 9.56%, while the Health Insurance Fund of Australia will see the lowest increase.

The adjustment of the rebate, which is tied to premium inflation versus general inflation, is expected to decrease for all private health members for the first time since the pandemic. Additionally, the income threshold for avoiding the Medicare Levy Surcharge penalty by holding private health insurance is rising from April 1, further incentivizing individuals to maintain coverage.

For those concerned about managing increased health costs, a strategy to mitigate the impact for at least a year is to pay annual premiums before April 1, potentially locking in lower rates for an extended period. Some insurers offer the flexibility to pay ahead, allowing policyholders to benefit from current prices. Alternatively, individuals can explore cost-saving measures such as adjusting coverage to exclude unnecessary services, increasing excess levels, or opting for a co-payment system to reduce premiums.

Tailoring health insurance coverage to individual needs can be challenging, as some insurers bundle services to balance costs across different age groups. However, platforms like privatehealth.gov.au provide tools to compare and select customizable coverage options. Increasing excess levels and considering co-payment arrangements are ways to reduce premiums, though the latter may pose financial risks in case of extended hospital stays.

As the deadline approaches and financial pressures mount, taking proactive steps to manage private health insurance costs can alleviate the burden on policyholders. By exploring available options, policyholders can navigate the impending premium increases and rebate adjustments while optimizing their coverage to suit their needs and financial circumstances.