The ‘risky gamble’ millions of Aussies are taking

Millions of Aussies plan to switch or ditch their health insurance this year, as the cost of living bites.

A quarter of Aussies with cover (26 per cent) plan to switch policies to find a better deal, according to new research by Finder, while a further 5 per cent plan to cancel their cover altogether.

Health insurance is one of the most stressful expenses for 14 per cent of Aussies who have it, the comparison site’s consumer sentiment tracker found.

• Also read: Junk health insurance: Why 20,000 Aussies are wasting $26 million

• Also read: 5 ways to cut the cost of health insurance

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Finder health insurance expert Tim Bennett said Aussies were being hit by rising costs from all angles.

“Aussies have been hit with everything from skyrocketing energy bills, to rising petrol prices and food bills and, in many cases, insurance is the first non-essential to be cut,” Bennett said.

“We may start to see higher rates of underinsurance over the coming months as many simply won’t be able to afford the policies they need.

“Those in the most vulnerable positions are at risk of ignoring health concerns for fear of a medical bill they can’t afford.”

‘Risky gamble’

Bennett encouraged Aussies to weigh up the costs and benefits of private health insurance.

“Giving up your private health insurance can be a risky gamble, especially if you have a health condition or anticipate needing surgery in the future,” he said.

“If you don’t have hospital cover before your 31st birthday, you’ll face a 2 per cent surcharge on your premiums for each year you aren’t insured thereafter – this is called the lifetime health cover loading.

“This means if you wait until age 60 to take out a hospital policy, you’ll pay 60 per cent more on your premiums than if you had held a policy since age 30.”

If you earn $90,000 or more, health insurance also means you can avoid paying the Medicare levy surcharge of up to 1.5 per cent of your income.

5 tips to save on health insurance

Here are Finder’s top tips to save:

1. Keep your cover up to date - review your cover at least once a year and make sure you are covered for everything you need and aren’t paying for things you don’t need

2. Get the most out of your extras - extras can be cost-effective if used correctly, so make sure you pick your extras cover carefully

3. Watch out for joint pregnancy cover - if you have a shared health policy, be careful of paying for pregnancy for both people

4. Pay in advance - if you have the funds available, consider paying your premiums a year in advance. This could help you lock in premiums at today’s prices

5. Don’t stress about extras - if you’ve already served your waiting periods with your current provider, it will carry over if you switch providers

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