Private health insurance increases 2021
The Minister for Health and Aged Care Mr Greg Hunt has negotiated private health insurance premiums increases from 0.5% to 5.47%.
The increases will come into effect on 1 April 2021.
The increases come after nearly a year of COVID-19 restrictions and reduced availability of health services because of lockdowns and the reduced ability of individuals to claim on insurers for services.
Many insured have simply not been able to take advantage of services for which they have been paying premiums.
The average increase in premiums is 2.74 per cent. However 28 of the 35 insurers will impose premium increases above the average.
The average yearly premium increase is $59.28 for singles and $126.88 for families. However, most people will be paying much more than the average annual increase.
What you can do to contain premium increases
Increased payments can be contained by paying a years worth of premiums at the current rate, in advance, to your existing insurance fund before 1 April 2021.
You could consider switching to a fund with a lower premium increase and lower ongoing cost than your current fund.
You could use the Government's tool to compare private health insurance policies and costs across all funds at https://www.privatehealth.gov.au/dynamic/search/start and then decide if you want to switch funds.
CHOICE also responded to the premium increases. CHOICE Senior Campaigner Dean Price said, “This premium price hike will make people question their need for expensive health insurance. This will be the second increase in most people’s private health insurance premium in six months. The average increase may be lower than other years but people should check how much their specific policy is going up as it will vary. Some funds have average increases up to 5.47%.”
“After a tough year for many people, with services stopped or delayed, this premium increase is going to hurt.”
“Nearly 70% of people with private health insurance identify it as a key cost of living concern, and this next increase will only add to people's worries. Minister Hunt’s approval of this industry’s price hike will no doubt make people consider dropping their coverage. This price hike is likely to result in more people dropping their coverage, putting more upward pressure on premiums, continuing the trend of recent years that has seen thousands of Australian’s dropping their coverage. The federal government needs to take real action to address issues that industry is unwilling or unable to fix themselves - we need a full review of the private health system.”
“People can shop around and lock in a price if they pre-pay before April 1, but that is a short term solution when people have been crying out for real action on price and value.”
23 December 2020.