Health insurers urged to scrap April 1 premium hike amid Covid-19 pandemic

By now you’ve probably heard that private health insurance premiums are set to rise again next month, with an average increase of 2.92 per cent kicking in on April 1. But consumer advocate Choice says health insurers should scrap their scheduled premium increases altogether in light of the current coronavirus pandemic.

“This year is going to be tough for many people and private health insurers can help a little bit financially by not passing on their premium increases,” Choice CEO Alan Kirkland says.

“If people can’t use the normal services that would allow them to claim on their private health insurance, then insurers’ costs will be going down. There is no way they can justify increasing premiums in this context.”

Insurer HBF has already moved to cancel the April 1 premium rise for its customers. It’s understood other funds are in talks to follow suit. 

Non-urgent elective surgeries like hip replacements and cataract surgery have been cancelled for the time-being because of the coronavirus crisis. Meanwhile, many dentists are already cancelling check-ups, while physiotherapy sessions and other extra services will be impacted by social distancing measures.

“Health fund premiums have gone up by 61 per cent over the past decade,” he adds. “Their justification is that the amount they payout to cover your treatment is going up. But that doesn’t hold up this year. We don’t think people should be paying full price when they won’t be able to access a full service.”

So is private health insurance worth it right now?

“We are yet to see private health insurance be of any help for patients with Covid-19,” Kirkland explains. “Testing for the virus and treatment is covered by Medicare and is free. The health response to Covid-19 is led by the public health system. Health insurance is not needed to cover treatment for Covid-19.”

However, according to health expert Anthony Fleming at Compare the Market, private health insurance can be beneficial for those over 60 if they are admitted to hospital as a private patient, provided they have not shown signs or symptoms within six months of taking out their policy.

Coronavirus will typically fall under the clinical category of Lung and Chest in health policy and is covered under either the Bronze Plus or Silver level across the majority of providers.

“It’s crucial for consumers to talk to their health fund to make sure their private hospital policy includes the right categories, services, and procedures relating to the coronavirus, along with any other health concerns they may have,” he said.

So what can you do?

If you have private health cover are under financial pressure, the consumer advocate recommends dropping your extras cover to save. “This year you won’t be able to use many of your extras benefits due to necessary social distancing to avoid infection with Covid-19. This may impact services like massage, physiotherapy, and chiropractic as well as non-urgent dental check-ups.”

Meanwhile, if you are healthy, with no planned elective surgery, consider contacting your health fund and asking them to suspend your cover or waive your premiums.

“You can drop health insurance for up to 1,094 days (three years minus one day) in your lifetime without incurring a lifetime health cover loading penalty,” Choice said. “You need to consider if this is the time that you want to utilise this break. If your health insurer allows you to suspend your policy the suspension doesn’t count toward the break.”

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your personal health requirements or existing medical conditions. That means it’s not personalised health advice and shouldn’t be relied upon as if it is. Before making a health-related decision, you should work out if the info is appropriate for your situation and get professional medical advice.