|Private health insurance pain as households struggle to cope with rises|
Private health insurance premiums are set to rise an average 6.18 per cent on April 1.
HALF of Australia’s private health insurance customers are thinking about downgrading their cover in an effort to combat soaring premiums.
Ahead of an average health insurance rise of 6.18 per cent on April 1, new research by consumer network One Big Switch has found that two-thirds of households have had trouble paying their bill.
Its survey of 40,000 consumers also found that many people are making sacrifices to stay insured, including reducing their level of cover, increasing their excess and spending less elsewhere.
One Big Switch spokesman Joel Gibson said this year’s premium hike was the second consecutive annual bill rise of about $300.
“Health insurance is one of those bills that really gets under people’s skin,” he said.
“Sooner or later, something’s got to give, or thousands of consumers will dump their private cover and fall back on the public health system.”
Consumers who \dump their private cover will fall back on the public health system. Picture: Publishing Ingram.
Mr Gibson said some people were trading away certain treatments, such as heart or eye treatments.
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He cautioned about quitting private health cover outright. “There’s the danger that if you drop it altogether, because you can’t afford it, it becomes harder to get back in if you are over 30.”
The Federal Government’s Lifetime Health Cover rules penalise people with a loading of 2 per cent for every year after age 30 that they don’t have hospital cover, up to a maximum 70 per cent loading. There are also penalty taxes for middle and higher income earners who don’t take out hospital cover.
“Australians want the peace of mind that comes with private health insurance, but many are now being priced out of the market,” Mr Gibson said.
Medibank chief customer officer Laz Cotsios said customers should review their health insurance policies at least annually.
“A cover review allows people to consider their situation and check that their cover still suits them,” he said.
Medibank branch, Adelaide Street, Brisbane. Medibank was floated on the stock market today. Customers discuss their impressions of the float. Photo: Claudia BaxterALSO: Pay doctors more but only when they provide the right care say health funds
“Don’t forget that you can prepay your health insurance to lock in your current premium.”
More than 20,000 people have signed a One Big Switch petition calling for more affordable private health insurance, and the consumer network has joined forces with News Corp Australia in a campaign to use people power to unlock a group discount offer from a health fund.
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Last week was the first week of the four-week Big Health Insurance Switch campaign and more than 45,000 people signed up. Joining is free and there is no obligation to accept any offer that is presented.
The Big Health Insurance Switch
For more details visit moneysaverhq.com.au. One Big Switch and News Corp Australia earn a commission on any offers that are accepted.