Health insurance premiums to increase in 2022 by lowest margin in two decades

author-avatar By
on December 23, 2021 Fact Checked
Health insurance premiums to increase in 2022 by lowest margin in two decades

Private health insurance premiums will rise next year by an average of 2.7%, the lowest annual average premium change for Australians since 2001.

Taking effect from April 1 2022, health insurance premiums will rise by an average of 2.70% across the industry throughout the new year.

Premiums for major for-profit health insurance providers such as BUPA, Medibank and NIB will increase by 3.18%, 3.10% and 2.66% respectively.

CBHS Corporate Health has hit the back pocket of members the hardest with a 5.33% increase, marking the largest across the for-profit funds.

On the other hand, not-for-profit fund Health Care Insurance’s 1.09% premium increase is set to be the lowest for 2022.

Minister for Health and Aged Care Greg Hunt said under proposed arrangements, many consumers will not receive a premium change until later in 2022.

"As private health insurers continue to work through the impacts of the pandemic, offering COVID related refunds, deferring premium rate rises and other measures support better care and to improve affordability," Minister Hunt said. 

"Under the lowest premium changes in 21 years, from 1 April 2022, on average a single person will pay an extra $1.12 per week, and a family $2.42 extra a week."

With the Australian Government continuing to invest $6.7 billion annually through the private health insurance rebate, Minister Hunt said in 2020–21, Australians received a record $22 billion in benefits for medical services through the private health insurance sector.

For-profits take part in the season of giving 

nib Managing Director Mark Fitzgibbon said while premiums have been approved to change from April 1, 2022, the health insurer is considering deferring premium increases in recognition of the ongoing impact of COVID-19 on its members. 

“It’s possible the increase could be deferred for likely three months depending upon developments," Mr Fitzgibbon said. 

For-profit fund Medibank remains on the same page with its competitor, returning around $135 million in COVID-19 permanent net claim savings to customers by deferring next year’s premium increases for 5 months.

Medibank's premium increase deferral is being funded from additional COVID-19 permanent net claims savings since 30 June 2021. 

Medibank CEO David Koczkar said putting a 5 month pause on premium increases will allow customers to save on average $93 for hospital and extras policies and around $8 on extras policies.

“While we know no one likes their premium to go up, healthcare costs are continuing to increase at a rate much higher than general inflation," Mr Koczkar said.

The 5 month deferral of premium increases will be applied automatically to 2 million active Medibank and ahm hospital and/or extras policy customers on April 1, 2022.


Image by Jonathon Borba via Unsplash.

Latest Articles

author-avatar
Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

Collections:

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree
to the Savings Privacy Policy