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Health insurance: The simple way Aussies can save $1,800 per year

Composite image of health insurance forms and Australian money.
CHOICE research found many Aussies were paying for more health insurance than they needed. (Source: Getty)

If you're paying for top-tier private health insurance but you rarely or never use it, you're likely spending thousands more than you have to.

New research from consumer group CHOICE found a single person could save more than $1,800 a year by downgrading their cover to a silver or silver-plus policy.

With cost-of-living pressures biting and the price of health insurance for HCF, NIB, Bupa and Medibank customers going up on November 1, there's no time like the present to take stock of your cover and see if you can make some savings.

Do you know what your policy actually covers?

According to the latest figures from the Australian Prudential Regulation Authority (APRA), more than 11.5 million Australians have health insurance policies covering hospital admission.


Of those 11.5 million people, a massive 38 per cent are paying for top-level policies, which offer the maximum level of cover and no exclusions.

CHOICE said that in some cases, these top-level gold policies cost nearly double the cheapest silver policy offered by the same insurer.

That means you could be paying a huge premium for a handful of extra services you may never need, such as cover for pregnancy and birth (including IVF), cataract eye surgery, hip or knee replacement, pain-management devices, sleep studies, insulin pumps, gastric-banding surgery, psychiatry, palliative care and rehabilitation.

CHOICE pointed out that some silver plans also covered some of these extras.

It encouraged people to assess their level of cover and consider whether they could save money downgrading, while still maintaining an acceptable level of cover.

How much could you save?

The cost of health cover varied between insurers and from state to state, but CHOICE said a single person with Hospital Premium Gold cover with HCF could save a massive $1,823 a year by downgrading to the company's silver plan.

For reference, someone in NSW on the same plan would still save close to $1,700 per year (and would likely be already paying slightly less for their cover).

Time to shop around?

For those looking to compare health cover across different providers, CHOICE has built a tool that lets you do just that.

Their experts rate policies based on out-of-pocket costs, fund complaints, cover, price and more.

Because CHOICE is 100 per cent independent, you won't been shown sponsored results the way you might by other for-profit comparison sites.

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