Need to know
- Health insurance premiums are set to rise on 1 April, so it's a good time to compare policies and make sure you're getting the best deal
- A number of funds, including Medibank, Bupa, HCF and NIB, will increase premiums by more than the average
- Consider choosing a higher excess to reduce your premium and prepaying to delay the premium increase
Health insurance can be expensive and with premiums due to increase by 3.73% on average this year, it's a great time to review your current cover – and provider – to make sure you're not paying more than you need to.
This year's increase is the highest in six years and some funds will have bigger price hikes than others.
Your health fund will let you know your policy's actual increase before it takes effect. If you can afford to pre-pay a full year's premium, you can lock in 12 months (or in some cases up to 18 months) of cover at that year's prices.
Follow our step-by-step action plan below to check if your premium is going up, decide if you really need health insurance, compare health insurance policies, and find a better deal.
On this page:
- 1. Find out your new premium
- 2. Decide if you really need health insurance
- 3. Review your health cover
- 4. Shop around for a better deal
- 5. Prepay your premium and pay by direct debit
1. Find out your new premium
The first step is to check how much your premium went up by.
Each year your insurer will send you an email or letter to explain any forthcoming changes to your rate, cover and excess.
Will a higher excess save you money?
An excess is a contribution towards each hospital stay that you can choose to pay to reduce your premiums.
- If you're not likely to go to hospital in the next one or two years, opt for a higher excess to reduce your premium.
- If you think you'll need to go to hospital sooner rather than later, switch to a policy with a lower or nil excess at least 12 months before your hospital stay.
2. Decide if you really need health insurance
Have a think about whether you actually need either hospital insurance or extras.
Hospital cover
You may decide you want private hospital insurance because it could save you money at tax time.
Take our to find out if hospital insurance will save you money at tax time and understand how the Lifetime Health Cover (LHC) loading affects you.
If you don't need health insurance for tax reasons you might still want it for peace of mind. Here are some things you should consider.
- Are you happy to rely on Medicare and public hospitals that provide excellent care, especially for life-threatening illnesses and emergencies?
- Do you want to use a potentially more comfortable private hospital?
- Is it important for you to choose your own doctor? For example, you might want to choose a plastic surgeon rather than a general surgeon for reconstructive surgery after cancer or a burn.
Extras cover
Do you pay too much for extras cover? Should you consider downgrading or dropping it altogether?
According to financial services regulator , health insurers earned $7303 million in premium for extras and ambulance but only paid out $5967 million in 2022/23, meaning many people spend more on extras than they get back from their health fund.
Many people spend more on extras than they get back from their health fund
Extras insurance has no bearing on government surcharges or your tax – it's essentially a budgeting tool to help you cover part of the cost of treatments or services over the year.
Make sure you're still covered for what you need, especially since health insurance changed to a tiered system of cover.
3. Review your health cover
Hospital insurance policies are divided into the following tiers of cover, with Gold offering the highest level of cover. You could save money by switching to a lower tier of cover if you don't need some of the services in that tier.
The tiers are:
- Gold – full or top cover health insurance in a private hospital, which includes services such as rehabilitation, pregnancy, and hip/knee replacements
- Silver – medium cover, which includes heart surgery and nearly all cancer surgeries
- Bronze – low cover, which includes treatment for the flu, broken bones, asthma, tonsils, breast and prostate surgery
- Basic – very little cover, if any.
Silver Plus, Bronze Plus and Basic Plus policies cover at least one service more than regular Silver, Bronze or Basic policies.
For example, a Silver Plus policy could also include cover for rehabilitation or cataract surgery, which are services normally only covered under Gold policies.
Make sure you're still covered for what you need. Especially if you need elective surgery such as a hip replacement.
4. Shop around for a better deal
Now is an ideal time to check if your policy is good value for money.
The same cover with a different insurer can be hundreds of dollars cheaper. The largest savings are available for Gold policyholders, but even if you have a Silver or Bronze policy, you'll probably be able to find a cheaper deal that will give you at least the same cover.
Consider comparing health insurance policies so you can see how your current premium fares against the top policies for your selection.
5. Prepay your premium and pay by direct debit
All funds allow you to prepay your premium for at least 12 months, but some give you a discount if you do so. Just make sure you prepay the full annual premium by 31 March each year, or before the date of the increase if your fund increases its premium later in the year.
Some funds also give you a discount for choosing to pay your premium by direct debit.
Of the big five funds, only HBF and NIB give these kinds of discount:
- HBF – 4% for direct debit and 3.84% if you prepay your annual premium, which adds up to a total discount of 7.84% if you pay your annual payment by direct debit
- NIB – 4% for direct debit.
HCF, Medibank and Bupa do not give a discount for direct debit or prepayment of your premium.
If your needs have changed or you're looking to save money, you can use our tool to compare health insurance and see what your options are. We've looked at thousands of policies from over 40 health insurers and given ratings based on price, out-of-pocket costs, complaints and more.
Other ways to save money on health insurance
Join a restricted membership health fund
Gold level health policies from restricted health funds can be substantially cheaper than those from open funds.
Restricted funds are open to Australians working in many industries, from police officers, soldiers, reservists and defence contractors, to nurses and midwifes. Union members, CommBank employees, doctors, teachers and workers of associated industries are also covered. Families (sometimes even siblings) and former employees are also eligible.
Check out the best restricted membership health insurance funds for more information.
Check whether you qualify for a corporate discount
You could easily qualify for a discount without knowing it. Private health insurance legislation allows health funds to give up to a 12% discount under agreements with companies. The company can then offer cheaper policies, for example, to its staff, members or customers.
Find out more about how to get a discount on your health insurance.
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