A Victorian couple did what a growing number of Aussies have done in recent years. But it came back to bite them. (Source: ABC/Getty)
Australians are set to be whacked with another price increase in the cost of private health insurance. The latest government approved price hike for the industry will, on average, see up-front costs rise more than 1 per cent above the current rate of inflation.
It comes as more Australians try to reduce costs by lowering their level of cover. But it’s a trend that has brought warnings about the potential to pay much more in times of medical crisis.
That was the case for Victorian couple Marie Cox and her husband Trevor, who had to suddenly come up with $30,000 to pay for urgent shoulder surgery after they learned on their way to hospital that their health insurance provider of 40 years wouldn’t cover the procedure due to the level of policy they had.
RELATED
On Tuesday, the federal government approved an average private health insurance premium increase of 4.41 per cent. It comes in slightly above the highest point of the predicted range when the private health insurers submitted their proposed premium changes to Federal Health Minister Mark Butler for review in November.
The jump in prices is above inflation and will come into effect on April 1 this year.
It is the largest average increase in percentage terms since 2017.
When Marie Cox had a fall and shattered her shoulder, her insurance provider Bupa said it wouldn’t cover the cost of the emergency surgery for a joint replacement procedure.
In the end, they had to borrow money from friends and remortgage their small home to pay for the surgery after needing to pay $16,000 up-front.
“I’m just a little fish and they make so much money — they had the ability to show compassion, but they didn’t,” she told the ABC about the devastating situation.
Years earlier, the couple had tried to move to a different insurance provider but were convinced to stay with Bupa by dropping their level of coverage to a cheaper plan, moving from gold coverage to silver.
In a statement supplied to Yahoo Finance, Bupa said it understood how upsetting the situation was for Marie and her partner and urged customers to make sure they understood their policy and get what’s right for them.
“We reviewed the customer’s history with Bupa and the policy they had with us when the accident occurred in 2022. The customer’s policy, which was changed in 2018, didn’t cover joint replacements as a clinical category and didn’t include accident inclusion,” the company said.
“Because joint replacements and accident inclusion weren’t part of the customer’s cover, no benefits were payable for this treatment.”
Switching to a cheaper plan was ultimately the couple’s undoing. But they are far from alone.
Analysis by consumer group Canstar shows a growing number of Australians ditching gold cover to save money in recent years as insurance providers issued the biggest price rises to customers on premium plans.
Since 2020, some 360,000 people have left gold policies since 2020, according to Private Healthcare Australia. Meanwhile government figures put that number higher, recently finding more than 400,000 people dropped their top-level gold coverage between December 2020 and 2023.
More Australians have been ditching gold cover to save on the cost of health insurance. (Source: Canstar)
The approved 4.41 per cent rise represents an industry average rather than a limit, with some insurers permitted to increase prices by more than others.
For example, AIA Health Insurance has the highest price increase at an average of 5.98 per cent across its coverage options, followed by NIB and Medibank.
On the other end of the spectrum is GMHBA Limited which has an increase below inflation at just 1.98 per cent.
As noted by Canstar, insurers will typically roll out higher hospital insurance premiums for members with gold coverage.
“While the average hike is sitting at 4.41 per cent, for those with a high-level of cover, know your premium increase could be far more severe,” Canstar’s data insights director, Sally Tindall, said.
“If history is anything to go by, the increase for Australians with gold cover could be in the vicinity of 11 or 12 per cent.”
She said customers worried about paying more could look to switch to a comparable policy within the same tier which could “help mitigate or even neutralise the price hikes”.
“Get on the phone to your provider to understand exactly how much your premium is going up by. Then spend 30-minutes doing a health check on your insurance. It could potentially save you hundreds,” she said.
AIA Health Insurance
5.98%
NIB Health Funds Ltd
5.47%
Medibank Private Limited
5.10%
Hospitals Contribution Fund of Australia Ltd
4.96%
BUPA HI Pty Ltd
4.80%
Health Care Insurance Ltd
4.53%
Latrobe Health Services Limited
4.53%
ACA Health Benefits Fund Limited
4.48%
Mildura District Hospital Fund Ltd
4.25%
St Luke’s Medical and Hospital Benefits Association
4.25%
Reserve Bank Health Society Ltd
4.13%
Peoplecare Health Limited
4.01%
Australian Unity Health Limited
3.98%
Health Partners Limited
3.94%
Teachers Federation Health Ltd
3.94%
Cessnock District Health Benefits Fund Limited*
3.92%
Doctors’ Health Fund Pty Ltd
3.67%
Westfund Limited
3.26%
CBHS Corporate Health Pty Ltd
3.25%
CBHS Health Fund Limited
3.25%
Defence Health Limited
2.99%
National Health Benefits Australia Pty Ltd**
2.96%
Phoenix Health Fund Limited
2.95%
Navy Health Ltd
2.88%
Health Insurance Fund of Australia Limited
2.60%
Police Health Limited
2.53%
HBF Health Limited
2.15%
GMHBA Limited
1.98%
Get the latest Yahoo Finance news – follow us on Facebook, LinkedIn and Instagram.
