Australia has a highly regulated health insurance industry. Every year health funds go through a process to increase their policies (including 485 visa health insurance policies) which include:
- Submit to the government the proposed price increased the fund would like to make
- Negotiate (when applicable) when the government believes these increases are ‘not reasonable’ taking into consideration health costs, CPI and other elements
- Mail existing policy holders of the exact changes to policy prices (this occurs in March)
- Change the policy prices (this occurs on the 1st of April).
The chart below made by HIF shows the approved increases that have occurred after stage 2.
As the chart highlights, NIB (IMAN) has received approval from the government to increase their policies by 7.99% which is the highest in the industry. Other funds that offer 485 visa health insurance include Australian Unity (6.62% increase), Medibank (6.49%), BUPA (6.35%) and HIF (2.90%).
Its highly unnatural for the health funds to have a such a variance in their policy increases with previous years seeing only a small variance in price increases. One could argue that NIB (IMAN’s) increase is over 267% that of HIF because one fund is a ‘for profit’ while the other is a ‘not for profit’ with any dividend going towards pushing down future policy prices. This viewpoint was discussed on HIF’s website and while this may be true to some effect it is still highly unusual for the difference to be so large. A possible other reason may relate to recent government legislation which has penalties for those firms that have a high proportion of younger policy holders. Historically NIB has targeted under 35’s based on the fact they make fewer claims making them more profitable. It is for this very reason that the government wanted to make it fairer so that rather then all other health funds copy this strategy and ignore middle and older aged individuals it rewards those funds that had a more balanced or older policy base. This will also help address the ageing Australian population which are leading to more health claims per person.
The numbers in the graph are average across each funds policies from 485 visa health insurance through to permanent residency cover. It’s difficult to know the extent that these averages will be felt by 485 visa holders but based on 2013 data it’s expected that closely correlate the average. For existing 485 health insurance holders it’s recommended that the policy they hold be reviewed. This is based on not only value for money but also the features to understand if they have the policy that’s right for them. A key element to consider is ‘extra’s cover’ which caters for services such as dental, optical and physio. If over 2013 you used these services regularly you may find that extra’s health insurance for 485 visa holders is a worthwhile investment. For those looking to get 485 health insurance for the first time and are looking at price its recommended to factor in these projected policy increases first before making your decision. As stated above, the policy prices will increase from 1st of April so what may seem cheap currently may actually become significantly more expensive in a month or two.
Once all the health insurance for 485 visa holder prices are updated on the fund’s website on the 1st of April our authors will review the policies (and their price) and review from scratch which policy is recommended. The panel includes an Australian Doctor who knows the Australian health insurance industry inside out and knows that the cheapest policy isn’t necessarily the best value for the consumer. It’s critical to understand that with the Australia health insurance for 485 visa holder market been highly regulated that many features of policies are exactly the same. This includes elements such as waiting periods with most elements having a 12 month waiting period when it comes to pre-existing injuries and other elements such as pregnancy.