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2017 Private Health Insurance Rate Rise

The 2017 Health Insurance Rate Rise is just around the corner and it has just been announced that premiums are going to increase by an average 4.84%; this is what you should know.

Each year on the 1st of April, health funds operating in Australia increase their premiums. The private health insurance premium increase is designed to support the increasing cost of health services. While not all of the costs are passed on to members, some are.

The lowest average increase for 2017 will be 2.98% and the largest average increase for 2017 will be 8.53%. Many private health insurance consumers do not understand that their premium increase may be more or less than the announced average fund increase – in 2017 individual policies will increase as little at 0.17% and some will increase by 13.02%!

In 2016 the lowest average price increase was 3.76% and the highest average price increase was 8.81% while the average overall cost of health insurance premiums across the country went up by 5.59%.

Rate Rise Example 2017

While it’s important to be aware of the average price increase for each fund as announced by the Federal Health Minister, it’s more important to be aware of how much your specific health insurance policy or product is increasing. Your health fund is required to inform you in writing how much your particular premium is set to rise before the price increases on April 1.

Many private health insurance consumers do not understand that their premium increase may be more or less than the announced average fund increase – in 2017 individual policies will increase as little at 0.17% and some will increase up to 13.02%! When the cost of health care increases, health insurers must increase their benefits to keep you covered. And because we’re living longer, we’re claiming for more services over a longer period. These higher benefit payouts push premiums up.

It’s important to use the 2017 March period as a reminder to compare your health insurance policy with a comparative service like Choosewell to ensure you are getting the best cover for your situation at the best price. The private health insurance industry is regulated by the Federal Government so you should feel at ease switching between funds to get the best deal for your situation.

It’s an issue that we see all too often, consumers sitting on the same policy for years, and a lot of the time they end up paying a higher premium each year for the same cover.

Let’s take a look at what you’d be paying if you sat on the same policy for three years. If you took out a family policy in January 2014 with annual repayments of $2,800 and your payments increased by the average 6.2% in April 2014, you’d then be paying $2,973 for the same cover. If you stayed on the same cover and your payments increased by the average 6.18% in 2015 then you’d be paying $3,157. In 2016 the average increase was 5.59%, taking annual repayments from $2,800 in 2014 to $3,333 in 2016. In 2017 the average price for health insurance will increase by 4.84% taking this total to $3,495.

That’s a total increase of $695 in premium for the same cover over four years. With increasing competition in the health insurance industry it’s likely that you could now find better value health insurance cover at a more competitive price.

If you haven’t reviewed your health insurance cover in the last 12 months, or your health needs have changed, March is a great time to understand what you are paying for, and what value it brings. Given the enormous breadth of policies available today, there may now be a more suitable product in the market for you… so you may also save money!

Get in touch with Choosewell today on 1300 421 154 or compare thousands of products and product combinations online today. We’ll help you find the best cover for your situation from our leading partners and see if we can save you some money while we are at it!

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