How to give yourself a health insurance discount
With health insurance premiums set to rise, small changes can yield big discounts if done right. Here’s how you can save on your policy.
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Private health insurance can be a costly addition to household budgets and with many health funds about to lift premiums it’s important to know exactly what you are paying for.
On April 1, private health insurance premiums are set to increase by an average of 2.70 per cent.
There are some exceptions – HCF and nib are deferring the annual rate rise, Medibank has extended its five month deferral to six months and Bupa has announced it will delay a price increase until October.
With just under a month until the price increase, now is the opportunity to review your cover and potentially get a discount on your policy.
Try and find cheaper health cover
1. Look for health insurance discounts
You might be able to save money on health insurance by keeping an eye out for any discounts on offer by your fund, or other funds offering incentives to switch, during the premium rate hike season.
“Some funds offer a discount for paying by direct debit rather than credit card while others have special introductory offers such as waiving some extras waiting periods or several weeks free,” a spokesperson for comparison website iSelect, Sophie Ryan said.
“Some funds offer free dental check-ups while others waive excesses for kids going into hospital.
“Check what kind of preventive health benefits your fund offers – some offer discounts on things like swimming lessons, weight loss courses, gym memberships and even hats and sunscreen.”
2. Pay a higher excess to lower your premiums
If you pay a higher excess on your health insurance you will probably find you can pay a lower premium.
This is a good option if you know you can afford the higher excess amount if you ever need to pay it.
“As part of the government reforms to make private health more affordable consumers can opt for a higher excess to reduce their annual premium,” Ms Ryan explained.
“If you think you’re unlikely to be admitted into hospital in the near future, increasing from the excess on a family policy from $1,000 to $1,500 could save a family up to $350 a year.”
3. Stay on your parent’s health insurance until 31
Instead of paying for your own singles policy, it’s worth considering staying on your parents health insurance.
From June 2021, health funds were allowed to develop policies that allow dependent children to remain on their parents’ policy until the age of 31. The age limit for dependants with a disability have been scrapped completely.
By remaining on a parent’s policy, young adults can avoid having to fork out annual premium payments – saving them big dollars.
If you removed your adult dependant child before the age increase was introduced, talk with your insurer to see if you’re able to add your child back onto your policy.
4. See if you can get an age-based discount
Young people can avoid the Lifetime Health Cover (LHC) loading, thanks to the introduction of premium discounts for young adults who hold their own policy.
From April 2019, insurers can offer people aged 18-29 years discounts of up to 10 per cent on their hospital premiums that will continue until they turn 41.
Once they turn 41, the discount will be gradually phased out at a rate of 2 per cent per year and they’ll also avoid the LHC loading charges too.
It’s important to check with your current health fund about whether they offer the age-based discount.
5. Discounts for paying via direct debit
One of the most important issues to consider is how you’ll manage the payments for your health insurance policy.
There are a number of ways your insurer will accept payments, but paying via direct debit can offer customers a simple payment option.
Many health funds offer customers discounts of up to 4 per cent if you pay by direct debit either from your bank account or credit card.
The other benefit of paying via direct debit is avoiding having to manually enter your details every time your premium payments are due.
6. Pay upfront for the year
Another way to receive a discount on health insurance is by paying 12 months in advance and locking in your premiums.
Paying upfront at the previous year’s rate before your insurer’s premium hike deadline is an easy way to avoid yearly premium increases.
Ms Ryan said ‘freezing’ your premium can help alleviate the financial stress that comes with the annual price hike.
“If you are in a position to do so, prepaying your annual premium upfront for the full year before your increase takes effect will lock in your current rate and help you avoid the 2022 premium increase for another 12 months,” she said.
7. Compare and switch to save
With so many policies on offer, it’s important to shop around and compare the benefits and incentives each insurer can offer.
“Saving money doesn’t have to mean compromising your level of cover, with many customers able to ease the budget strain by switching to a similar level of cover with a different fund for a cheaper price,” Ms Ryan said.
She also said it’s good to know that if you decide to switch to a new health fund you won’t lose the hospital waiting periods you’ve already served at your current fund.
“Any hospital benefit waiting periods you have already served are protected by law if you switch to an equivalent or lower level of hospital cover with another insurer.”
When it comes to switching covers, it’s important to check that things like extras, benefit limits, discounts and loyalty bonuses will be recognised or provided at an affordable price that suits you or your family.
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