Private health insurance price rises: 10 tips to avoid paying more

It can be costly to get into health trouble with no insurance. Our expert shares how to shave costs as premiums rise.

Updated Wed, 6 Mar 2024, 10:12 pm 4 min read

If you had a $2,000 health insurance policy back in 2014 (a decade ago), it’ll soon cost very close to $3,000. That’s because the government has just approved premium increases averaging 3 per cent after a long negotiation with insurers, who wanted more like 6 per cent.

It’s the biggest increase since 2019 but the timing is the real killer, with energy prices, groceries, and car and home insurance all up by hundreds of dollars in the past year, while housing costs are up by thousands.

A lot of us will be thinking about cutting the cost - or even dumping it. But, we Aussies have become very attached to our health insurance since the pandemic, maybe because elective surgery wait times in the public system have blown out to record lengths. (Almost one in 10 people are waiting a year for surgery, according to official health data. Ouch.)

Insurance rise date circled on a calendar and Australian money scattered on top. — Insurance costs are rising across the board, but new increases to health cover have just been announced. *(Source: Getty)*

Do you have a story to tell? Contact yahoo.finance.au@yahooinc.com

The worst increases are from CBHS Corporate Health (5.82 per cent), CBHS Health Fund (4.51 per cent), nib (4.10 per cent), HBF Health (3.95 per cent) and Health Insurance Fund of Australia (3.87 per cent).

RELATED

But all is not lost. There are things you can do to cut costs instead of dumping health insurance all together. Here's what you need to know.

Top 10 tips to save hundreds on health insurance

1. Downgrade

Can you remove cover you don’t need, such as pregnancy or joint replacements? If so, you might be able to downgrade from Gold to Silver, or Silver to Bronze cover, and save hundreds of dollars.

There’s a list of the treatments included in each level of cover at privatehealth.gov.au.

2. Ditch extras

There are actually two kinds of health insurance policy:

‘Hospital’ policies are the ones that cover you for hospital procedures and have certain tax implications
‘Extras’ policies cover you for ‘allied health’ procedures outside hospital, such as dental, physio and optometry.

So, if the ‘Extras’ part is costing you more than you claim each year, you can dump it without any tax penalties

3. Higher excess

Can you increase your excess to $1,500 for families/couples or $750 for singles? Some funds allow this, and it could cut your premium by hundreds too.

4. Pre-pay

Can you afford to pre-pay for a year before April 1? If so, you’ll lock in the current pricing for 12 more months and postpone the price hike.

5. Direct debit

Does your health fund offer up to 5 per cent off for direct debit? Some do, so it pays to ask.

6. Switch

Can you save on your premium by switching to the same level of cover (Gold/Silver/Bronze/Basic) at a different health fund? Sometimes there are hundreds of dollars’ difference.

Health insurance is "portable", like a mobile phone number. You can take your remaining annual benefits with you and you won’t have to serve waiting periods all over again if you switch to "comparable cover" or lower. This includes any waiting periods for pre-existing conditions - a little-known fact.

Try a free comparison service such as Compare Club or Compare the Market, or do it yourself at privatehealth.gov.au

7. Cash in

You can collect a bonus for switchers and new customers if you join another health fund (these can be worth up to about $500 or 10 weeks free, on top of any premium savings).

You can get these at consumer clubs such as One Big Switch, where I work, or sometimes direct from health funds when they have a promotion running.

8. Divorce

If your partner has a large Lifetime Health Cover Loading, is it cheaper for you to have separate policies? If you’re on the same policy, they apply an average of your loadings.

9. Marry

If you’re a blended family, is it cheaper to combine your policies? There’s no extra charge for each child - a one-child family pays the same as a 10-child family, so it might be cheaper to cover everyone on one family policy rather than two single-parent family policies.

10. Suspend

It’s not the end of the world if you need to get rid of it. Medicare provides a solid safety net in Australia, even though the public system has its challenges. Millions of people get by without private cover - either by choice or necessity.

The tax system punishes you for not having health insurance if you earn over about $90,000 but the extra tax is still less than private health, in most cases. You’ll also have to pay a loading if you lapse for a while and then return, so maybe ask your health fund to suspend, for starters, in case your circumstances change.