OLDER Australians will again be slugged with a double whammy on their private health care costs, being forced to pay the government-agreed price hike effective from April 1 while also facing a rebate cut.
Due to changes to the age-related and means-tested health insurance rebate in 2013, retirees have seen their concessions reduced annually - from 35 per cent for those aged 65-70 and 40 per cent for those over 70 - to current levels of 30.25 and 34.57 per cent. These will be cut to 29.65 and 33.88 per cent on April 1.
While Health Minister Greg Hunt has confirmed that premiums will increase by 3.95 per cent on average - nearly twice the rate of inflation - some consumers will see price hikes as high as 8 per cent.
Robert Curley from the Association of Independent Retirees said an Australian retiree couple with one member aged 70-plus now paid 46.5 per cent more for their health insurance than in 2013 (about $110 a month) and faced a further $19 increase.
The organisation's pre-budget submission to the federal government highlights the cost of health insurance, warning that retirees are being actively discouraged from retaining cover. It urges the government to restore the 65 years and over rebate tier 1 concessions to pre-2013 levels.
Labor has said that if elected it will cap health insurance increases to 2 per cent for two years. It will also ask the Productivity Commission to review private healthcare, focusing on its value, quality and affordability. This is supported by the Australian Healthcare and Hospitals Association whose chief executive Alison Verhoeven said it was "the only way forward out of the mess that private health insurance has become".
"Years of premium increases in a time of low wage growth and well-above-CPI increases, combined with proliferating exclusions, gap fees and policy documents which are constantly changing and often incomprehensible, has left many Australians wondering why they bother with health insurance," Ms Verhoeven said.
Review your policy
CONSUMER group CHOICE warns that rising insurance costs are driving many consumers to seek out low-cost policies that offer little in the way of actual cover.
Some "junk" policies covered as few as 10 treatments, while others only treated patients in public hospitals, raising questions about their worth as a "private" hospital insurance policy.
Abigail Koch from comparison website comparethemarket.com.au advises adapting policies to meet shifting health and lifestyle priorities.
"Services such as pregnancy, for example, won't be applicable to your circumstances," she said.
"You can drop this service from your policy and add treatments that you need to be covered for, which could include joint replacement (hips, knees, etc) prosthesis and cardiac surgery.
"Pregnancy is usually bundled into top level cover, so it's important if this service is no longer required to shop around for a policy where it is excluded and save on costs.
"There are a range of extras that you can include within your policy that may become more useful as you age. These can include remedial massage, physio and optical.
"You could save a substantial amount by tailoring your policy to suit your needs by dropping unnecessary health procedures."