The Federal Government announced on Monday that health insurance premiums are set to increase in the coming year.
Health Minister Greg Hunt confirmed that he has approved a 2.74 per cent increase in prices, to take effect in April 2021, which he says will be the smallest increase in private health insurance premiums in two decades.
“Australian Government reforms designed to make private health insurance more affordable, simpler to understand and attractive for all Australians are working, and this record low change continues the current trend of low premium changes,” his office said in a statement on Monday.
“The 2.74 per cent average industry change from April 1, 2021, will be the lowest average change since 2001, and considerably lower than the average change of 3.25 per cent in 2019, and 2.92 per cent in 2020.”
According to Hunt, from April 1, 2021, a single person will pay an extra $1.14 per week, and a family will pay $2.44 more a week. However, depending on your insurer, changes may vary slightly. More than 13.7 million Australians will be impacted by the cost increase.
Meanwhile, Dean Price, health campaigner at Choice (one of Australia’s leading consumer advocacy groups) said this will be the second increase in most people’s private health insurance premiums in six months.
“The average increase may be lower than other years but people should check how much their specific policy is going up as it will vary,” he said. “Some funds have average increases up to 5.47 per cent. After a tough year for many people, with services stopped or delayed, this premium increase is going to hurt.”
Price went on to say that this price hike is likely “to result in more people dropping their coverage”, adding “we need a full review of the private health system”.
“Nearly 70 per cent of people with private health insurance identify it as a key cost-of-living concern, and this next increase will only add to people’s worries,” he said. “Minister Hunt’s approval of this industry’s price hike will no doubt make people consider dropping their coverage. The federal government needs to take real action to address issues that the industry is unwilling or unable to fix themselves.
“People can shop around and lock in a price if they pre-pay before April 1, but that is a short-term solution when people have been crying out for real action on price and value.”