“Keeping health insurance affordable is a priority for Australian Unity.” —Rebecca Windsor, CEO Insurances, Australian Unity.
Key points
- Private health fund premiums will change from April 1, 2024, as part of the annual review by the Department of Health and Aged Care.
- Australian Unity remains committed to keeping premiums as low as possible, and while increases are never welcomed, they are necessary to keep pace with the rising cost of healthcare and treatment.
- Talk to Australian Unity if you want to find ways of reducing the impact of the rate review. This include conducting a Health Cover Check, or locking in the 2023 rates for up to 12 months by paying in full by March 31.
Sadly, it’s a fact of life that prices rise every year, and it’s no different with health insurance. Australian Unity remains committed to keeping premiums as low as possible, and while increases are never welcomed, they are necessary to keep pace with the rising cost of healthcare and treatment.
For any health fund, adjusting premiums is necessary to manage escalating costs associated with the healthcare sector. Contributing factors include heightened hospital expenses, increased charges from healthcare providers, the growing cost of medical equipment, an increased number of claims, more complex and costly procedures and, more recently, the impact of inflation.
On 1 April 2024, following the annual premium price review, it is possible that the cost of your health insurance will increase. This change allows Australian Unity to meet the increased cost of healthcare services, caused by a number of factors including Australia’s ageing population and rise in chronic conditions. This increase will ensure our health fund remains sustainable, allowing us to continue to meet the healthcare needs of our members.
The good news is that over recent years, while the majority of Australians were battling cost of living pressures, Australian Unity deferred premium increases, twice, saving our members approximately $32 million.
“Our focus remains on meeting the wellbeing needs of our customers and delivering value to our members, as many Australians face cost of living pressures,” says Rebecca Windsor, Chief Executive Officer of Insurances.
“Keeping health insurance affordable is a priority for Australian Unity,” she adds.
“We understand there are many in our community who are doing it tough. That’s why we deferred the 2023 premium increase on top of a raft of relief and support measures, and we remain committed to easing the current financial pressures our members may be experiencing.”
Why do premiums change each year?
Health funds review their premiums annually, ensuring they keep pace with the rising cost of healthcare. Every year the Department of Health and Aged Care assesses premium increase applications from health funds, considering the merits, and relevant data and expert opinion to ensure changes are fair and justified. All decisions require final approval from the Federal Minister for Health and Aged Care.
These annual applications and changes are necessary to ensure the sustainability of Australian Unity's private health insurance and the industry as a whole.
The good news is that the financial incentives associated with private health insurance—like the private health insurance rebate which is a government contribution to help with the cost of your private health insurance and avoiding the Medicare Levy Surcharge (MLS) and Lifetime Health Cover loading—still remain.
If you don’t hold private hospital cover and you earn over $93,000 (for singles) or $186,000 (for couples and families), then you may be required to pay the MLS at tax time. This amounts to between 1 percent and 1.5 percent of your income.
The Lifetime Health Cover loading is a policy introduced by the government to encourage people to take out private hospital insurance at a younger age and maintain it over time. Once you turn 31, you have until the following 1 July to buy private hospital cover. Failure to do so exposes you to extra loading fees. For every year you delay, you may have to pay an additional 2 percent (up to a maximum of 70 percent) on top of the cost of your private hospital cover.
“A lot of government incentives are put in place to drive behaviour that will keep the system sustainable,” says Rebecca.
“You could theoretically just pay the tax, or you could actually derive some value from that tax by purchasing private health insurance.”
A reflection of the wider economy
According to Private Healthcare Australia, submissions from private healthcare providers for this year’s premium review reflect the economic landscape in Australia—rising costs caused by inflation—with the added need to introduce complex IT upgrades to combat the ever-growing threat of cyber-attacks.
“The cost of medical and hospital services has increased and there’s been a surge in hospital admissions funded by insurers. This is putting pressure on premiums,” says Dr Rachel David, CEO of Private Healthcare Australia.
“Inflation is hitting the health sector hard. Hospitals are struggling with the rising costs of recruitment, power and food, and this flows through to health funds.”
But it’s not all doom and gloom, with the Australian Competition and Consumer Commission estimating that health funds returned approximately $4.3 billion in cashback and deferred premiums to their members.
Ways to reduce the impact on your hip-pocket
With health insurance premiums likely to increase across the sector, how can you reduce the impact on your household budget?
Rebecca recommends talking to Australian Unity’s customer service team to find ways of reducing the impact of the rate review.
“A regular policy review is a good way of making sure you’re paying for what suits you and your family,” suggests Rebecca. “If you’ve held the same policy for a long time, you may be paying for services you no longer need, or missing inclusions you could find beneficial.”
Your options include:
- Conducting a Health Cover Check, where you and a consultant analyse your life stages, healthcare needs and the appropriate policy options available.
- Paying the full year in advance, effectively locking in your rate by 31 March for a further 12-months.
Australian Unity is proud of its history of providing affordable health insurance to our members. With our over 180-year commitment to the wellbeing of Australians to continue into the future.
“Over the last two years, Australian Unity has compared favourably to other health funds in terms of premiums,” Rebecca says.
“We are committed to working closely with our members to address any concerns they may have, so it’s important for our members to reach out to our dedicated customer service representatives if they have cost of living pressures, or if they have any questions regarding a change to their premium.”
Want to discuss your health cover, or to lock in your current rate? Talk to us today.
Disclaimer:
Information provided in this article is of a general nature. Australian Unity accepts no responsibility for the accuracy of any of the opinions, advice, representations or information contained in this publication. Readers should rely on their own advice and enquiries in making decisions affecting their own health, wellbeing or interest. Interviewee names and titles were accurate at the time of writing.
