A premium rise, signed off by Health Minister Sussan Ley, of three times the inflation rate will likely result in around 500,000 Australians giving up their private health insurance.
A Galaxy poll commissioned by iSelect has found that more than 530,000 Australians are planning to ditch their health cover, which could put a huge increase of pressure onto public hospitals.
On April 1, premiums will rise by around $100 for singles and $200 a year for families, pushing members to either shop around or drop their cover entirely.
The survey showed that families who have either hospital only or extras only cover are the likeliest to leave their health fund. One in five families and couples surveyed who had one of these plans are considering dropping their cover.
The premium increase of 5.59% which was signed off by the Turnbull government is more than three times the inflation rate, with some health funds jacking up premiums even further. Medibank’s combined hospital and extras package for families is up a whopping 9.5%.
While 7% of Australians are likely to can their private health cover all together, another 7% are likely to switch, with over two million health fund members likely to do nothing.
However, iSelect believes that’s mostly because they are unaware that they do not have to serve a new waiting period if they switch health funds. By law, if you are switching to an equivalent or lower level of hospital cover, there is no additional waiting period.
Anticipating the backlash around the health insurance spike, the Australian Medical Association released a guide to show which funds pay best and worst around 22 of the most common procedures.
It found that HBF paid out the highest benefit in 9 of those 22 procedures, while a consortium of 25 small players grouped under the AHSA brand came in second.
The worst were Mildura Health Fund and GMHBA, providing the lowest benefits for 19 of the 22 procedures. Neither Medibank or NIB, the nation’s largest health funds had the best payout in any of the procedures.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.