Private health insurance costs set to soar

Thousands of Australians have ditched their private health insurance cover in recent months but most who have kept it will be stung by premium rises next month.

During the COVID-19 pandemic nearly all funds delayed their annual hikes on April 1 by six months, but now those increases are about to kick in.

Insurer HBF is the odd one out - it's the only fund who won't be increasing premiums at all in 2020.

Other insurers are increasing premiums by an average of 2.92 per cent but most are offering discounts to those still financially struggling during the pandemic.

HBF's head of member propositions Blake Delcanho urged Australians to check up on their premiums before October 1 so they don't get unexpectedly caught out by rising costs.

Most health insurers are offering discounts to those financially struggling during the pandemic. Picture: iStock.
Most health insurers are offering discounts to those financially struggling during the pandemic. Picture: iStock.

"Consumers need to take the time to understand what their private health fund is doing at this time when it is more important than ever to make sure they are getting the best value for money," he said.

"If you're not on JobKeeper or JobSeeker, have not applied for hardship relief and are not an HBF member then it's likely that your 2020 premium increase will kick in on October 1 or in early 2021."

Latest Australian Prudential and Regulation Authority statistics showed in the June quarter 28,600 Australians ditched hospital cover and 34,400 got rid of extras cover.

Funds also paid out significantly less in this period - $3.3 billion was paid out in hospital benefits - a fall of 12.9 per cent compared to the previous quarter. 

While for extras cover $915 million was paid out in claims, a fall of 32.9 per cent.

Medibank's chief customer officer David Koczkar said they recognised many people were still doing it tough right now.

They have rolled out a 50 per cent premium reduction for six months for members on JobKeeper, JobSeeker and other government payments.

This will save them about $800 each.

"If you're in financial hardship due to COVID-19, contact your health insurer to discuss your options and review your cover to ensure it best suits your current needs," Mr Koczkar said.

Medibank's premiums will rise on average by 3.27 per cent.

While rival Bupa will increase premiums by 3.26 per cent next month, but will defer premium increases for six months for customers on JobKeeper or JobSeeker.

All private health insurance members will see their premiums rise again on April 1 next year.

sophie.elsworth@news.com.au

@sophieelsworth

Originally published as Private health insurance costs set to soar


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