Need to know
- Private health insurance funds will apply a 3.03% average increase on 1 April, but Medibank, Bupa, NIB and HBF have a higher than average increase
- If you're able to prepay for 12 months before your fund increases the price, you can make some good savings and delay the 2024 price increase
- CHOICE experts say it's also a good time to review your health insurance to see if you can get a better deal
Health insurance premium increases in 2024
Health insurance premiums will increase in 2024 by an average of 3.03%. This follows a 2023 increase of 2.9% and a 2022 increase of 2.7%, but some funds will have bigger price hikes than others. While the 2024 increase is the largest in five years, it's just over half of the 6% increase health funds initially asked for.
The lowest increase this year is again by HCI (Health Care Insurance), which is increasing premiums by just 0.27%. CBHS Corporate Health has the largest average increase for the fourth year in a row with a 5.82% price hike across its policies.
Of the big funds, all but HCF have above average increases:
How to avoid health insurance premium hikes
An excellent way to save money is to prepay your annual premium before 31 March to 'lock in' your current premium. This also allows you to make use of health fund direct debit and pre-pay discounts. Of the big funds only HBF and NIB offer these discounts:
- HBF – 4% for direct debit and 3.85% if you prepay your annual premium, which adds up to a total discount of 7.85% if you pay your annual payment by direct debit.
- NIB – 4% for direct debit.
Some funds allow you to prepay for longer than 12 months, for example NIB allows 13 months and HCF allows 18 months. But don't leave it until the last minute to prepay as some funds require prepayment by a certain date. Check with your fund to find out.
Now's a good time to review your cover
Before you lock yourself into your current fund for the next 12–18 months, this is an excellent time to do a quick health insurance audit and review your current cover to make sure you're not paying for things you don't need. Could you downgrade to a cheaper policy or get a better deal at another insurer?
The same cover with a different insurer can be hundreds of dollars cheaper. The largest savings are available for Gold policyholders, but even if you have a Silver or Bronze policy, you'll probably be able to find a cheaper deal that will give you at least the same cover. Our experts have found that in some cases you could save up to $1870 per year.
CHOICE tip: Before prepaying your premium, it's worth comparing health insurance policies and seeing how your current premium fares against the top policies for your selection.
More people get the private health insurance rebate
As of 1 July 2024, more people will receive the government rebate as the income thresholds have changed.
Now a single person earning up to $97,000 a year (or a couple, family or single parent earning $194,000) gets the full rebate on their private health insurance premium (hospital and extras).
For those earning more than $97,000, the rebate steps down incrementally until it reaches 0% for people earning over $151,000 (or families, couples or single parents earning over $302,000). People aged over 65 receive a higher rebate.
The rebate is usually paid by way of reduced premiums.
How is the rebate calculated?
While the average premium increase gets a lot of attention, the cost of your premium normally goes up for another reason: a reduction in the private health insurance rebate. But like last year, this year the rebate stays the same, as the premium increase was lower than usual.
A cut of the rebate happens depending on how much premiums increase compared to the rate of inflation – the bigger the difference, the more the rebate goes down. As there was no difference this year, the rebate stays the same.
The most recent cut to the rebate was in 2021 when it dropped by about half a percentage point to 24.6% for people on the base tier income.
The rebate amount is recalculated every year on the same day premiums go up. The rebate for 2024 stays the same as the increase was again smaller than the rate of inflation like in 2022 and 2023.
Stock images: Getty, unless otherwise stated.
