It’s that time of the year again…10 tips to save on your private health insurance costs before 1 April
10 tips to save on your private health costs so you can plan to enjoy your spend somewhere else!
We’re writing about private health insurance because of a few things that have happened with our clients…this is all true!
One of my clients was reviewing her annual private health insurance spend, and wondered whether or not to continue with pregnancy cover extras - they hadn’t decided on whether to try for another baby. She decided to keep pregnancy cover (as a just in case) and dropped their infertility cover.
Outcome: lower costs of cover
Later that week, when we were reviewing private health premium costs for another client, we discovered that their policy also included pregnancy cover. However in this case, it was for a 55-year old man! Given that this man is not a seahorse - which happens to be the only species on Earth where the male gets pregnant* - pregnancy cover was completely unnecessary!
Outcome: even lower costs of cover
Yet another client didn’t know that they could save on premium costs by paying in advance, before private health funds routinely increase their fees on 1 April each year.
Outcome: even lower costs of cover
Key points you need to know for 2023…
Health insurance premiums will go up by 2.9% on average in April, but some funds including Medibank, Bupa, HCF and NIB will again delay the increase;
The average increase is 2.9%, but some health funds have increased their prices by more, including several large insurers; and
Due to the lower than normal premium increase, the rebate stays the same in 2023.
Health insurance premiums will increase on 1 April 2023 by an average of 2.9%**. This is only slightly higher than last year's 2.7% average increase, but some funds will have bigger price hikes than others. And, this year’s 2.9 percent increase is well below the 10-year average of 4.4 percent^.
Several big insurers have announced above-average increases, and several funds including Bupa, Medibank and NIB will delay their health insurance premium increases:
Medibank will delay its 2.96% premium increase until 1 June 2023 (this includes AHM).
Bupa will delay its 3.39% premium increase until 1 July 2023.
NIB will delay its 2.72% premium increase until 1 September 2023 (this includes Qantas Health).
HCF will delay its 3.33% premium increase until 1 September 2023 (this includes RT Health).
HBF – will increase its premiums by 4.49% on 1 April (this includes CUA).
Your health fund will let you know your policy's actual increase before the increase takes effect. If you can afford to pre-pay a full year's premium, you can lock in 12 (or in some cases up to 18) months of cover at that year's prices.
But before prepaying your premium it's a good idea to compare health insurance policies to make sure you're still getting the best deal.
Here are our top 10 tips for saving on your private health insurance costs
1. Timing is everything!
Check out the details of what you are covered for, and work out and make any relevant changes. For example, you may need:
better hospital cover (for elective surgery, like cataracts);
less extras (as your kids may not need cover for dental braces anymore); or
less cover altogether (if children are leaving home).
Shop around for a better deal and to check out what you can be covered for, check out the private health comparator.
2. Discounts
Some Private Health Funds will offer a discount for:
early payment; or
direct debit
Check out what your fund is actually offering.
3. Advance payments - lock in a price if you pay before 1 April
If you pay your premium 12 ( and possibly 18 months in advance in 2023) , you could save on the annual 1 April fee increase. If not, you will be locked into higher rates. You need to pay the day before renewal day at the latest. i.e. pre-pay your premium for 12-18 months the day before their deferred 2023 premium increase date. Some funds only allow 12 months to be pre-paid, but some allow 18 months.
Important: For lower costs, check the date of the fee increase. If it’s a weekend date ( in 2023, 1April is a Saturday), make sure you pay by the Friday before! Otherwise you’ll be up for the higher premium!
4. What's your income?
Depending on how much you earn, if you are not covered by private health insurance you're going to have to pay an additional 1% - 1.5% tax towards the Medicare Levy Surcharge (MLS). (Base income threshold is $90,000 for singles and $180,000 for families).
Note this is payable for every day you don't have insurance within a financial year and is on top of the 2% Medicare Levy.
5. How old are you?
If you don’t take out private cover, the Lifetime Health Cover loading kicks in - this adds 2% loading to your premium for every year you don’t take out cover, after age 31.
6. Check out the excess
Just as you have an excess on car insurance, you may be able to opt for a higher hospital cover excess, and save on premium costs.
7. Is there an excess for extras?
An excess may also be there for extras cover- some funds let you choose a percentage fee refund i.e. higher cost extras can mean a bigger percentage refund.
8. Corporate membership
Some employers and organisations offer a health insurance policy that they partly, or fully fund, for the benefit of employees. Which means lower costs for you.
9. Check out the fine print
Insurers have many different deals, waiting times and plans for what is covered. The costs may look attractive, however older policies are often more generous.
10. Customer service
This is all important if you or your family are unwell. It’s really worth it to know that your insurer is there for you at a time when you absolutely need it!
Next steps:
Call us for a quick chat or drop us a line for help with saving on your private health insurance costs and getting your money working for you.
* The Conversation: The secret sex life and pregnancy of a seahorse dad.
** https://www.choice.com.au/money/insurance/health/articles/how-to-avoid-health-insurance-premium-hikes
^ https://www.health.gov.au/ministers/the-hon-mark-butler-mp/media/annual-private-health-insurance-premium-rise
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