Health insurance is on the chopping block for many Australians, but it pays to think carefully before giving up private cover altogether.
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As living costs rise, plenty of Australians are looking at ways to cut household costs, and it seems one of the first things to go could be private health insurance.
Research by Finder shows one in seven Australian adults, the equivalent of 2.9 million people, will let their health insurance expire this year.
Finder analysis found the cost of health insurance has increased by 195 per cent since 2000. That's more than double the rate of inflation over the same period (69 per cent).
This means a policy priced at $1000 annually in the year 2000, would now cost $2953 for the same level of cover.
The sting in the tail according to Finder, is that over the past year insurers' profits have more than doubled while the number of claims has decreased.
Health insurance costs are set to increase again later this year. The average premium increase in 2022 will be 2.7 per cent.
So, a single policyholder, paying an average of $1920 annually, will see their premiums rise by $52 per year on average.
Private insurance premiums rise every year - usually from April 1.
However, the major health insurance funds have delayed their price increases to around October this year.
This gives consumers more time to shop around and see if they could do better.
There are no downsides to comparing and switching your policy.
Simply bailing out of cover may save money but it does bring downsides.
It is likely you will have to re-serve waiting periods if you decide to rejoin in the future.
Thanks to our system of Lifetime Health Cover loading, you could face even higher costs further down the line.
For every year after age 30 that you don't have hospital cover, you'll pay an extra two per cent on top of your premiums once you eventually take out a policy.
This is why it is a good idea to compare policies and premiums before giving up cover altogether.
The privatehealth.gov.au website makes it easy to see how your premiums shape up - there can be significant differences between the most expensive policies and the cheapest across the same levels of cover.
Opting out of services that you're unlikely to need can also save on premiums.
A 30-something for instance is unlikely to need knee replacements, while it's almost certain a 60-year-old doesn't need obstetric care.
There are no downsides to comparing and switching your policy.
You won't need to give up your waiting periods as these can be carried over between funds as long as you opt for the same level of cover or less.
Just make sure you read the fine print to know exactly what you are insured for.