How to save by switching private health cover
Some of Australia's biggest health insurers delayed their premium hikes this year due to ongoing cost-of-living pressures, but unfortunately for many policyholders, this temporary financial relief is almost over.
The key date is October 1. This is when funds including Bupa, nib, GMHBA/Frank, and Defence Health (which combined have almost 40% market share) will put up their prices.
If the price of your policy went up earlier in the year, or will next month, no doubt the extra hit to the hip pocket is unwelcome. You may even be thinking whether the cost is even worth it.
Recent research commissioned by comparison service iSelect revealed that more than a third of Aussies surveyed with private health insurance say they're likely to cancel or downgrade their policy to try and save money due to increased cost-of-living pressures.
While downgrading your level of cover - even temporarily - could be an option to save money if you're really feeling the pinch, we'd encourage Aussies to explore other avenues before simply cancelling altogether. Read on as we explain.
Is health insurance still worth it?
We could all do with some extra peace of mind, right? Having private health insurance can give you that. It may be comforting to know that in the unfortunate event of a serious illness, with the appropriate cover, you and your loved ones could have access to private healthcare.
We know Aussies value that peace of mind because the number of people with private health cover is increasing. Data from the Australian Prudential Regulation Authority (APRA) shows that there have been 11 consecutive quarters of growth in private health insurance membership, with a record 14.5 million Aussies now having private health cover.
So, if you're on board with the increasing number of Aussies who see the value in having private health insurance, it's important to consider regularly checking that your policy is suited to your lifestyle and your budget, especially if you're struggling to afford it.
How can you save money without ditching?
Great question! The study we mentioned earlier also found that 70% of Aussies surveyed say they have either never switched or haven't switched their health insurance plan and/or provider for more than two years.
That's concerning because shopping around and switching is one of our top tips for potentially saving money. In fact, of the policyholders surveyed, we calculated that $448.80 is the average amount they're saving as a result of switching their plan and/or provider in the last two years. That's nothing to sneeze at.
iSelect's general manager of health, Andres Gutierrez, says it's important to remember that saving money doesn't have to mean compromising your level of cover.
"Many customers may be able to ease the budget strain by switching to a similar level of cover with a different fund for a cheaper price," Andres says.
"Keep in mind that any hospital benefit waiting periods that you've already served are protected too, as long you switch to an equivalent or lower level of hospital cover."
Are you paying for things you don't need?
While you're reviewing your policy and shopping around, you may actually find that your current plan doesn't suit you or your family. You could be forking out money for things you don't need. For younger people this could include cardiac, cataracts or joint replacements. Older Aussies could be paying for IVF and pregnancy cover despite the kids flying the coop years ago.
So as health insurance prices rise, take some time to review your policy and see if you could switch and save money.
Remember, there is no limit to how often you can change your policy and/or provider. Switch as often as you need to, particularly if your needs, income changes or your budget tightens.
Get stories like this in our newsletters.