1 October price hike: Aussies urged to do a health check on their insurance

• • • • 26% of Aussies with health insurance find it among their top three financial stressors
      • Australians could save $700 by switching health funds
      • Tips for saving on health insurance without ditching it altogether

24 September 2020, Sydney, Australia – Australians have just under one week to beat the health insurance price increase on 1 October warns Finder, Australia's most visited comparison site.

Planned health insurance price hikes were paused in April due to COVID-19, but many are now about to kick in and Aussies have just a few days to lock in a cheaper price.

Finder's Consumer Sentiment Tracker shows that for more than a quarter of Australians with health insurance (26%), it is among their top three financial stressors. That's equivalent to 2.9 million Australians with health insurance who are stressed about paying their premium.

Health insurance comes in as the second most stressed-about expense for those that have it, just behind rent/mortgage (44%) and followed by energy (20%).

Sophie Walsh, insurance expert at Finder said Aussies looking to tighten the budget belt have more than one option when it comes to their health cover.

"The financial fallout from COVID-19 has left many households looking for ways to reduce their spend. Health insurance is a significant expense that could easily come into the firing line for Aussies trying to cut costs. However, there are ways to reduce your premium without ditching your cover altogether."

Despite the financial pressure health insurance puts on households, only 1 in 10 (12%) have switched their insurance in the last 6 months. Aussies that switch to a cheaper health fund policy in the same tier of hospital cover can potentially save more than $700 a year.

"When it comes to your health insurance, loyalty doesn't pay off. If you haven't switched recently, you could be paying more than you need to."

Walsh suggests that poor Aussies who want to switch health funds should download the Finder app.

"Connecting your accounts to the Finder app will tell you if there's a better deal on the market, and if you could be saving money by switching to a new health fund."

This year, health insurance premiums are set to rise by 2.93% on average, with some policies increasing by as much as 5.63%.

While this might not seem like much, it does all add up. Families on a gold tier policy that costs roughly $340 could pay an extra $200 a year if they face a 5% increase on their premiums.

Walsh urges Australians to consider "trimming the fat" on their cover before putting their policy on the chopping block.

"There are a number of things you can do to save on cost, without ditching your health insurance altogether.

"Instead of dropping your policy completely, review your cover to make sure you're paying for the right level of cover that suits your needs and lifestyle. If you're young, fit and healthy, don't pay for gold cover if you're highly unlikely to need it."

Previous Finder research shows that only one in five (20%) prepay their annual premium upfront.

"If Aussies opt to pay their annual premium in advance before the price increase comes into effect next week, they'll lock in the current prices until next year. And if prices do rise as usual on 1 April again next year, they could potentially skip 2 price hikes in 12 months."

Price increases will vary across providers. Check your insurer's planned increase here.

Top 5 providers by market share

*According to 2019 State of the Health Funds Report

Tips for saving on health insurance without ditching it altogether

• Compare health funds. Hospital insurance is split into tiers: basic, bronze, silver and gold. The coverage is relatively similar but prices can vary significantly. Weigh up what you need and pick a plan accordingly.
• Ditch the couples policy. A couples policy may help you save on paperwork, but it still costs the same as two singles policies. Couples may even end up paying more for their insurance than they need to if one person needs a higher level of cover.
• Mix-and-match your hospital and extras cover. While combined cover may be more convenient, customers may receive better value or more tailored cover if they split their policy depending on their health requirements.
• Regularly review your hospital tier. You may have opted for gold cover during pregnancy, but no longer need the same level of cover now that your baby is born. Opting for lower-tier cover can see your premium drop significantly. Just be aware of what treatments you'll be ditching before you make the call.