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Breaking news: health insurance premiums up, up, up

The government just announced that health insurance premiums will rise by an average of 3.03% from April 2024. That’s the largest annual increase in health cover premiums since 2019 - in the middle of a cost of living crisis.

The terrible timing is obvious so here's what else you need to know:

❗Health insurance premiums will rise from 1 April - and never mind that several funds already hiked premiums last October.

😡 At the time of writing, no health funds have indicated any delays to their annual price hike from April.

⏰ Your fund is supposed to give you 30 days’ notice, so how late are they? Well, it appears in 2024 that 30 day notice has been waived by the government, but don't let that stop you taking action and finding a better policy.

Health insurance premium hikes: What you need to know.

Health funds are raising your premiums from 1 April 2024, including Australia’s five biggest funds - who account for the majority of all health insurance policies. These funds are:

The average health premium will increase by 3.03%, but when the average premium hike among the ‘big five’ is 3.57%.

Internal Compare Club data suggests that a 3.57% price hike could add up to an extra $208^ for people on expensive policies like retirees and families.

Be aware: The 3.03% average increase is just that: an average of all health funds’ average increases. This means your policy could go up by a lot more, and some premiums will rise by less.

One fund is even increasing premiums by an average of 5.82%. Last year we spoke to customers who had their premiums go up by over 10%, so keep an eye out for any communications from your health insurer.

🧮 Need help figuring out your health insurance premium increase? There's a calculator for that.

Health fund handbacks:

Last year, funds such as Medibank and Bupa announced that they’re still in the process of returning some of their profits from the pandemic years back to members.

• This is separate to today's premium increase announcement. It's a refund to members who couldn't use their policy during COVID-19 lockdowns.

• Other health funds, like ahm, rolled over their members' unclaimed extras as another means of support.

But… insurer refunds reflect the challenges in private healthcare during the pandemic. They’re not related to this year's premium price hikes.

“This [refund] relates to the past reflecting the customer getting less value from their cover then they expected, and comes with no strings attached. It should not be confused with the premium increases, which ask customers to pay higher premiums for their insurance moving forward."

- Compare Club CEO Lance Goodman

The bottom line:

This year’s health insurance premium price increase is running very late, given policyholders are supposed to get 30 days' notice before any changes to their premium - and we're outside that timeframe now for a price rise on 1 April.

• Watch for letters, SMSs, or emails from your insurer. Your insurer must communicate any changes to your premium to you, and those notices will be arriving very soon. If your insurer has an app, maybe look in there too.

• Do your sums. Look at what you'll be paying, and whether you're getting good value for your healthcare dollar. For example, are you getting a percentage rebate for your extras cover, or a set dollar amount that means you'll be paying more out of pocket over time?

• Not all policies will rise by the average amount. Some households will still be on a competitive policy, and others will end up paying a lot more per year.

• Shop around to make sure your policy still delivers value for you and your family - and if April 1 seems like it's coming up too fast (it is, you're not wrong), contact a comparison service like Compare Club to do the legwork - and the quick switching - for you.

So review your cover and checking any communications from your insurer. Not all policies are going up and plenty of other funds offer good value for your money.

Go deeper:

A guide to the 2024 health insurance premium increase

Compare Club’s health insurance calculator

Government Ombudsman: why health insurance premiums go up