5 ways to reduce your health insurance premium

With premiums rising again on April 1, here are 5 tips for saving hundreds on your Health Insurance.

Health insurance has become one of the most contentious topics of 2018 so far, with Labor now promising to freeze Health Insurance price hikes at 2% p.a. for two years, following premium increases  of an average 3.95% announced for April 1.

And for consumers, it means it’s time to shop around and consider ways you could reduce your premium.

Here, we’ve compiled five ways you could save on your health cover:

1. Review your Cover

Have your children grown up and moved out of home, but you’re still paying for obstetrics cover? If you don’t know the answer, you’re not alone…

Many of us haven’t reviewed our policy in years and could be paying extra for cover we don’t need.

Removing obstetrics, IVF and pregnancy services from a policy saves about $500 p.a. for a family, on average.

Make sure you know what you’re trading away when you downgrade your policy. The ombudsman has some advice on policy “exclusions & restrictions” here.

9Saver Tip: Subscribe to 9Saver to be part of our Health Insurance Campaign and get access to exclusive Health Insurance offers (coming soon).

2. Increase your Excess

As with most insurances, you can often cut your premium by increasing your Excess.

For Health Insurance, “an excess is an amount that you agree to pay towards the cost of hospital treatment, in exchange for lower premium costs”.

You may be required to pay an excess every time you go to hospital, or only the first time each year – it depends on the policy. But if you’re not a regular visitor to hospital, a higher excess might be a good option for you to save some money.

The maximum excess allowed by the Federal Government is currently $1000 for families and $500 for singles.

3. Ask about “contribution groups”

You don’t need to be part of a business to enjoy the benefit of a ‘corporate discount’. There’s actually a very handy loophole in Health Insurance regulation that says Health Funds can offer “contribution group” discounts of up to 12% off the standard premium to defined groups of people, such as employees of a company or motoring club or other organisations.

For example, the NRMA has a special offer for members with Australian Unity, the RACQ has a special offer for members with Australian Unit, the RACWA has a special offer for members with HCF, and the RAA has a special offer for members with HCF.

However, while they are sometimes called “corporate discounts”, it’s an industry secret that you don’t always need to be corporate to get them.

So ask your fund if they can put you into one of these groups: you might already qualify and don’t know it, or sometimes they’ll just add you to a group to keep you from leaving.

9Saver Tip:

  • “Contribution group” members can save up to $480 on a typical $4000 family premium, and some funds use this loophole to retain members who are leaving.

4. Switch health funds

It’s sometimes possible to save hundreds (or even over $1000 in rare cases) by switching health funds. There are a few reasons for this.

Different funds target different types of customers and they will drop their price for the particular type of customer they are chasing – which could be you!

Also, most funds will offer you something to switch, such as ‘one month free’, or waived waiting periods, or $100-$500 in cashback or gift cards.

For tips on finding a better offer, see the 9Saver Guide on “How to shop around for Health Insurance”

5. Pay annually, by direct debit

If you pay annually before April 1, when all health funds raise their Premiums, you pay the old price for the coming year and you effectively postpone the price rise for 12 months.

While it’s not an option for everyone, it is worth considering.

Also, some funds such as NIB, GMHBA and Australian Unity offer discounts of up to 4% for paying by direct debit, so ask for it.

Any advice provided in this article is general in nature in that it does not take into account an individual’s particular circumstances or needs. Individuals should consider their own objectives, financial situation or needs, and if in doubt seek appropriate advice, before proceeding.