OSHCstudents – Millions of Australians have received notice that their private health cover premium is increasing from 1 November 2022 and the question on everyone’s lips is ‘why?’ In this article, we have the answer to the tough question about premiums increasing.
For those of you who have held private health insurance for a while, you might recall that the premium increase usually takes place in April each year.
Why is my premium increasing?
The cost of healthcare is increasing
The first reason is inflation, which is the sustained increase in the price of general goods and services. For example, that soy latte you bought for $4.20 in 2012 is probably selling for closer to $6 now, your electricity bill has gone up and the car insurance that once cost you $700 is now charging you $799.
It’s not just you affected by inflation, it’s everyone from doctors and nurses to physios and dietitians. Because health providers have to pay more money for things like medical equipment, medication and staff (as well as rent, electricity, etc.), they may need to increase the prices that they charge for their service.
More people are claiming
Australia’s aging population coupled with a rise in chronic conditions such as heart disease and diabetes means more and more Australians are using healthcare services. With trends set to continue, more pressure is put on the healthcare system and claims made through private health insurance.
Will the price go up again?
It is difficult to predict any future premium increases as this is largely dependent on claims expenditure and any relevant government incentives and reforms. Because the health industry is heavily regulated, the Federal Minister for Health must approve any changes to your premium – and that generally only happens every April. So, you won’t see any other price changes until April, 2023.