By Lauren Ferrone
Published: Friday, March 9, 2018
Health insurance premium increases have become a fact of life for many of us, but with just a few savvy steps you can minimise the impact on your hip pocket.
1. Check your current cover
It’s the perfect time to take stock of your current health needs and the kind of services you may need access to in the next few years.
Make a list of the ‘must-have’ services you regularly access or would cost a lot if you did need them in an emergency, and then the ‘good-to-haves’ which might make up your extras cover.
Check your cover includes all your ‘must-haves’, and see whether you’re actually using some of the extras you might be paying for, like massage or chiro. This will help you determine the level of cover you actually need for the coming year, and will also help you compare policies.
2. Shop around
Speaking of comparisons, the average premium increase is 3.95% (which is actually the lowest increase in 17 years) but individual insurers’ increases range from 2.28% to 8.90%, so complacency could result in a harsh shock when you get your next bill.
Use that list of ‘must-haves’ you made in step 1 to help you look past the marketing spin and compare apples with apples – just because a policy looks cheaper, doesn’t necessarily mean it’s the right deal for your needs.
Don’t forget, waiting periods may apply if you switch insurer and levels of cover, so if you’re likely to need to access rebates straight away you may want to weigh up the pros and cons of switching to make sure you’re really getting a better deal overall.
3. Pay your premiums in full
Regardless of whether you’re staying with your current insurer, switching companies or getting your first policy, you can lock in next year’s cover at this year’s rates by paying before 1 April.
Find out if your insurer offers any extra discounts or incentives for early-bird payment, annual payment or paying by direct debit. You may even find you get discounts for working at a certain company or being a member of an organisation, so go to your insurer’s website or give them a call to check what’s available.
4. Don’t forget the Medicare levy surcharge
If this health insurance business seems all too difficult, it’s still worth checking how much extra you could be slugged in tax without it.
Individuals earning $90,000 or more – or families with incomes of $180,000 or more – will have to pay the Medicare levy surcharge at tax time if they don’t have private health cover. It starts at 1% and rises on a sliding scale alongside your income, up to a maximum of 1.5%.
This may seem like a miniscule percentage, but even if you just scrape into this income bracket on earnings of $90K, it’ll cost you $900 annually.