While health insurance is often considered a “grudge” purchase,ranking next to tax returns and dental work on consumers’ least-want-to-do list,it takes a surprisingly small number of steps to drive down its cost.
Paying too much? You can switch health funds are any time.Supplied
For example,those who have not switched health insurance for a while are often paying more than they have to and are missing out on introductory offers,such as a certain number of weeks of free coverage.
Insurance experts also say consumers should expand their search to smaller health funds,which can be easily overlooked as they do not have the marketing and advertising budgets of the health insurance sector’s big players.
From April 1 each year,health funds increase their premiums. The average increase for 2023 is 2.9 per cent,but this year many funds,as they did last year,will delay their increases until later in the year.
Choice’s latest report on found that the most expensive ‘silver’ and ‘gold’ hospital policies tended to be those provided by large funds. The federal government has rules that are designed to help remove restrictions on moving between insurers.
If you change to a hospital policy that has lower benefits or excludes benefits for some treatments,the lower benefits as well as any exclusions will apply immediately.
However,when you switch to a policy with the same level of hospital cover as your current policy,your waiting periods won’t be affected,says Uta Mihm,health insurance expert at consumer group Choice.
“Many health insurance funds will manage the switching process for you,” Mihm says. “So,once you sign up with them,you don’t have to call your old insurer to cancel.”
Sophie Ryan,spokesperson for comparison site iSelect,says you should not assume that a combined hospital plus “extras” cover from the same insurer will be cheaper. Extras cover is where you get a portion back each time you visit health providers,such as dentists and optometrists.
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It is important to be aware you are allowed to take hospital cover with one insurer and extras with another,Ryan says. And sometimes,couples can save by taking out individual cover rather than couples’ cover.
For example,only one of the couple will need pregnancy coverage. Also,one of the partners may anticipate needing more dental work than the other partner and opt for a higher level of extras cover,Ryan says.
The Commonwealth Ombudsman for says if you are changing your extras policy to another insurer,most insurers will not need you to serve waiting periods again for the benefits you had on your previous policy.
You should ask the insurer to confirm,in writing or via a recorded phone call,which waiting periods will apply to you,if any,the Ombudsman says.
An easy way to save,for those who have the spare cash,is to pre-pay for 12 months cover (with some funds allowing up to 18 months pre-payment) just before your fund increases its premium.
Gary Hunter,insurance writer at comparison site Finder,says it is always a good idea to look at what you have claimed over the past 12 months. You should check to see if you are paying for extras cover that you do not use,he says.
If that is the case you could be better off switching to extra cover that has lower caps and fewer categories of claims with a lower premium,or having hospital-only cover.
As well as shopping around and comparing a range of other policies and providers,there are other ways you could save on your health insurance premiums.
For example,consider opting for a higher excess,which is how much you pay out of your pocket before the insurance kicks in. Generally,the higher the excess or co-payment you are willing to pay,the lower the premium.