With health insurance premiums set to increase by an average of 2.74 per cent on 1 April, now is a good time to find out if you’re getting your money’s worth with your current health insurance policy.
In some cases, premium increases could add an extra $112 on to your policy per year. Before the annual premium increase comes in then, here’s 5 ways you can make sure you’re not spending more than you need to be.
1. Check what benefits you’ve used
It’s also a good time of year to look back and see what parts of your health insurance you’ve used — or more importantly, not used. The most common way that Aussies have saved money is by going for the most basic policy.
There’s probably no point in paying for a top tier gold or silver hospital policy that covers services like cataracts, joint replacements and heart conditions if you’re relatively young and healthy.
Keep in mind though, switching to a bronze or basic policy is only worth it if you’ve not used any of the benefits you get with a more comprehensive policy and you still want to avoid paying the Medicare Levy Surcharge (MLS).
Be sure to check your extras cover as well. It’s only worth having if you’re claiming more than the premiums you’re paying.
The best way to do this is to add up the benefits you’ve used over the year and compare them to your premiums. If you login to your health fund account, you should be able to find out how much you’ve claimed.
2. Check your premium increase
This is probably the easiest way you can save money. Some health funds plan to increase their premiums by as much as 5.47 per cent in April 2021, while others will only go up by 0.5 per cent. You might be able to save hundreds of dollars a year simply switching to a cheaper provider.
3. Compare your options
By comparing your current policy with other available funds, you can ensure you’re getting the best possible deal on your health insurance.
According to the Finder survey, regularly switching health insurers (12 per cent) is one of the top ways that Australians are saving money on their health insurance. If you’re switching to a similar level of cover, you usually won’t have to re-serve waiting periods.
For example, we compared the price differences between a Gold level policy for a couple living in Sydney, which ultimately cover the same 39 treatments. The price difference ranges by $60 per month, that’s $720 per year you could be saving.
4. Evaluate your current needs
At least once a year, it’s worth evaluating your specific health and financial situation and planning ahead. Maybe you need physio or chiro more regularly. If so, it could be time to upgrade your extras cover. For more choice and opportunities to save, consider buying your hospital and extras cover separately.
If you’ve had a wage increase over the last year, you can avoid the Medicare Levy Surcharge by taking out hospital cover. You can actually save money on your taxes by taking out a cheaper policy than the surcharge.
Another easy way to save is by increasing your excess. This is the amount that you need to pay when you make a claim. Increasing it will lower the cost of your monthly premiums, which can save you money over the course of the year — just make sure you’re comfortable with paying more should you need to make a claim.
5. Take advantage of deals and free periods
Health funds are always to sign up, such as waiving waiting periods, weeks free or gift cards, so take advantage of them. Some providers also let you pre-pay annual premiums which lets you lock in cheaper prices.
Despite the massive savings you could make, two in five of us still do nothing to save on our health insurance each year. While shopping around for a health provider isn’t the most exciting task, a few minutes of work can save you heaps money.
Written by Alex Holderness, insurance publisher at Finder.