What rising health insurance premiums mean for you

From today, private health insurance premiums are rising by an average of 6.2 per cent from today, with some policies set to rise almost 20 per cent.

“These higher than inflation premium rises have now gone on for more than a decade, and something's got to give,” Mark Metherall from the Consumers Health Forum of Australia said.

For family cover, which costs $3,000 on average, the 6.2 per cent rise increases the premium to $3,186.

With a 20 per cent rise, the premium jumps to $3,600.

For singles cover, which costs $1,500 on average, the 6.2 per cent rise will take the premium up to $1,593, and a 20 per cent rise will take it to $1,800 a year.

“More and more elderly people are requiring additional health care and that comes at a huge cost to our health system and costs, and premiums are rising accordingly,” Grant Waldeck from comparethemarket.com.au said.

The private health insurance industry says the 6.2 per cent rise should be viewed against a 9.1 per cent increase in benefits payments last year.

Nurse Delia Scales says she cannot justify paying more for private health insurance.

“I had treatment for cancer in 2007, I ended up $10,000 out of pocket, I have since resigned from private health insurance, the cost is too high and the standard is too low,” Delia said.

However, opting out of private health cover can incur a tax penalty of at least one per cent of your income, depending what you earn.

Consumers aged 31 and older trying to get back into private health insurance may be hit with a lifetime health cover loading of two per cent per year.

“We've seen families save up to $1,700 by shopping around and moving from a comprehensive policy to a more basic policy that better suits their needs at their life stage,” Waldeck said.

Penalties for not having Private health Insurance:

• Incur a one per cent Medicare Levy Surcharge. Singles earning over $88,000 per year pay $880 surcharge.
• Couples earning over $176,000 a year pay $1,760. The levy is higher on higher salaries.
• The penalty for getting back into private health insurance is a possible surcharge, called a Lifetime Health Cover Loading, of two per cent of your income per year after the 31st birthday.

Learn more about choosing the right health insurance at www.comparethemarket.com.au