Older Australians At Risk Of Being Stung By Higher Health Premiums
Australians who are getting older are one of the groups most at risk of getting hit by private health increases, according to the consumer group CHOICE. 
If you wait until you are 35 to take out private hospital cover, you could pay an extra 10 per cent on top of your premium ... if you wait until you are 45, you could face paying an additional 30 per cent on top of your premium.
It gets worse the older you get. If you're 65 and have never had private health cover the LHC could be as high as 70%.
So older Australians who don't take out cover by June 30 will be penalised even more if they decide to take out cover later on.
The other group at risk at the end of the financial year are those who have received a payrise.
June is one of the busiest months of the year for private health, and financial experts say strict government rules mean that decisions may need to be made before June 30.
(Remember: you can get up to $300 cashback when take out a new hospital and extras cover with Australia’s largest not-for-profit fund via the Club. Click here for a quick quote.)
The Medicare Levy Surcharge is an extra tax of up to 1.5 per cent on the entire annual income of a person earning more than $90,000 a year or a couple earning more than $180,000 if they don’t have hospital cover.
The issue of affordability was close to crisis point in April this year when premiums increased yet again. Medibank chief Craig Drummond reported that in the year to November, about 9000 people opted out of private hospital cover in his fund alone.
It was the first time in about 15 years that coverage in the sector had gone backwards.
Mr Drummond told The Australian “Benefit costs have been running at around 5-7 per cent growth per annum for 10 years, while incomes of Australians have fallen to the 1-1.5 per cent growth rate.”
Combine that with energy costs rising by as much as 20% or more from July 1 and the budgetary pressure on an average household is a breaking point.
Federal Labor introduced a means test for private health insurance in 2012 so if you earn more than $90,000pa you don’t get the full rebate. The current federal government has also cut the subsidy it provides for health insurance from 30 per cent to 25 per cent adding a further $166 to the cost of health insurance by indexing it at a rate lower than premium rises.
The buzz acronym at the moment is ‘LHC”. You’ve probably seen ads on TV talking about it like some sort of horrible disease…..well it’s painful that’s for sure but only on your hip pocket. LHC stands for Lifetime Health Cover and it could be worth up 70 per cent or $2100 extra a year.
Nicky Breen from CHOICE told us this week on the Daily Drive radio show to assess your insurance needs and compare policies. “There are plenty of tips, tools and services available to help navigate this complex market.”
For example:
- Decide if you need cover by using an comparison site such as privatehealth.gov.au to compare policies.
- Don’t be tempted to downgrade to a “junk” policy. Although cheaper, you’ll end up paying hundreds in premiums and still won't be covered for many common treatments.
- Ask your insurer for an annual claims statement. If you are paying more in premiums than you are receiving in benefits you might want to reassess your coverage.
Sources:
