The federal government will also decrease its rebate slightly from 25.059 per cent for under 65s on the base tier to 24.608 per cent on April 1, making premiums a little more pricey.
“I think it will be tough for a lot of families,” Consumers Health Forum of Australia chief executive Leanne Wells said.
With non-elective surgery wait lists at public hospitals growing exponentially as the pandemic added to the backlog, the number of Australians who took out private health insurance actually grew in the last quarter.
Private health insurers increase their premiums on April 1 each year. But as the pandemic hit last year, many deferred their annual increase to October 1.
This latest price hike of an average 2.7 per cent will add around $122 a year on average to the family policy – the second in six months. Singles will pay around $60 a year more.
“We do encourage Australians who are struggling with the cost of private health insurance to consider switching rather than ditching,” iSelect spokeswoman Jessie Petterd said.
But it’s not all bad news. If you’re willing to switch insurers or sign up for the first time to avoid the 1.5 per cent Medicare levy surcharge, there are some decent incentives on offer.
And with the industry facing a big slump in profitability in 2020, they’re all clambering for new business – as long as you commit by March 31.
Some funds are offering e-gift cards and frequent flyer points while BUPA, Medibank, hbf, Health Partners and hif are promising six weeks free with waiting periods waived.
Other funds like ahm, nib and Frank are giving one month free.
Ms Wells warned some premiums may cost more in the long run and to not fall for the gimmicks.
She said healthy young families had to weigh up whether private health insurance is worth the cost.
Below are some of the incentives on offer:
- BUPA: Six weeks free, two and six-month extras waiting period waived
- Medibank: Six weeks free, two and six-month extras waiting period waived
- ahm: One month free and two and six-month extras waiting period waived
- hbf: Six weeks free
- nib: One month free and two and six-month extras waiting period waived
- AIA: Up to eight weeks free
- Cua: Up to $400 e-gift card and 4 per cent off premiums
- Qantas insurance: up to 140,000 frequent flyer points
- Australian Unity: Four weeks free and two and six-month extras waiting period waived
- Health Partners: Six weeks free and instant access to extras
- hif: Six weeks free and two-month extras waiting period waived
- Frank: One month free and two and six-month extras waiting period waived
- TUH Health Fund: Win a year of health insurance premiums in gift cards