Finance Finance News Premium hike to prompt health insurance rethink

Premium hike to prompt health insurance rethink

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Australians may rethink their private health insurance coverage in the wake of increases almost triple the annual rate of inflation, consumer groups say.

Insurance premiums will go up from April 1 next year by a weighted average of 6.2 per cent.

This implies an average rise of $3.86 a week, based on a basic combined family policy, equating to more than $200 a year.

The annual increase, approved by federal Health Minister Peter Dutton on Monday, comes after premiums rose by an average of 5.6 per cent in 2013 under the former Labor government.

It also compares with the current annual rate of inflation of only 2.2 per cent.

“This is an unhappy Christmas present for the many Australians who do struggle to meet the cost of health insurance,” Consumers Health Forum spokesman Mark Metherell said.

The forum and consumer group Choice said the increase was hefty and could make many people rethink whether it was worth having private health cover.

They advise consumers to compare policies to ensure they were getting a competitive price, review extras cover and check for discounts for paying in advance.

Mr Dutton blamed the former Labor federal government for putting pressure on the sector, saying the 2014 price rise could have been lower.

However, the number of claims was more than expected in the past year, meaning the overall cost of benefits paid out jumped by eight per cent on the previous 12 months.

The premium increases would help insurers absorb those increased costs, Mr Dutton said.

Labor said it was a slap in the face for Australians, two days before Christmas. Health spokeswoman Catherine King said when Labor was in power it tried to ensure the lowest possible premium increases.

The rises approved for 2014 range from 3.14 per cent for Health Partners policies to 7.99 per cent for NIB policies.