Australians with private health insurance are being warned to brace for the possibility of the biggest price hike in almost a decade.
Compare the Market analysis of health insurance premiums shows an increase of between 4 to 5 per cent would add between $105 to $132 to an average hospital policy of $2641.
For someone with an average combined policy with hospital cover and extras costing $3560, a 4 to 5 per cent increase would add $142 to $178.
The industry average price hike has not exceeded 4 per cent since 2017.
Compare the Market’s David Koch said the health minister had been dropping clues about the direction of premiums to manage public expectations.
“Reading between the lines, the government is (trying) to warm us up to the idea that health insurance premiums need to go up a bit more, in response to some of those system pressures,” he said.
“Over the past few years, we have seen Health Minister Mark Butler push back on health funds and demand lower, more affordable premium adjustments.
“This has led to longer negotiations, later announcements, and results that have kept average increases below the rate of inflation.
“This year, you get the sense of a growing consensus that health funds need a little more wind in their sails to keep things working, and make sure the system is well supported.”
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But Mr Koch said that while higher premium hikes were expected, that didn’t mean that members should simply accept them.
“If a 5 per cent increase is agreed, some Australians could be forking out more than $170 more for their cover each year for a combined policy,” he said.
“And we know not everyone is going to be affected in the same way. Some people could end up worse off because increases vary so much between funds, and between individual policies.
“Last year, we saw some of the biggest increases applied to gold policies which provide the highest level of cover and are already much more expensive.
“Australians need to pay close attention to what the change really means for them. When that premium notice drops in your inbox, take that as your prompt to do some detective work and see if you’re still getting a good deal.
“If the increase is higher than you expected, and you’re no longer getting good value out of your cover, it might be time to compare and switch.”
