How to reduce the cost of health insurance
Health insurance can be so expensive, but like other insurances it is something you will be glad you have when you need to make a claim. You just know that as soon as you cancel your policy you are sure to need it. Whether or not you are struggling to pay your premiums, there is little point in paying more than you need to, especially when there can be such a huge difference in the cost of premiums between insurers. There are some easy ways to reduce the cost of your health insurance, and these could save you hundreds, if not thousands of dollars each year.
How to reduce health insurance costs
- Revisit your policy every year – Just the same as we recommend searching for a better deal on car or house insurance every year when your policy is due for renewal, you should revisit your health insurance each year. The easiest way to do this is to use a service that does the leg work for you, like Compare the Market. All it takes is one quick phone call and they will compare policies from some of Australia’s top health funds for you, and best of all it’s free!
- Have your circumstances changed? – Health insurance needs change depending on your life stage, whether you are planning on getting pregnant, have kids at home or your kids have left home. There is little point paying for a policy that includes pregnancy related cover when you won’t be having any more children. Take a look at what your policy does and doesn’t include and make sure it still fits your families needs. You could reduce the cost of your premiums by removing cover you don’t currently need.
- Hospital, extras or both? – It is possible to have a policy that includes only hospital cover, only extras cover, or the both in one combined policy. Many people only want hospital cover to avoid paying the Medicare Levy Surcharge, while others prefer to only pay for extras cover for their dental and optical treatments. If you like the extras cover for services like dental but aren’t fussed about the hospital cover, consider dropping the hospital which could save you significant amounts of money each year.
- Hospital and extras on two policies – Just because you want both hospital and extras cover, it doesn’t mean both have to be with the same health fund. You could potentially save money by taking out separate policies with two separate health funds without compromising on the level of cover.
- Pay in advance – Some health funds will give you a discount if you pay your insurance premiums up front for the year ahead. If you have the money available, it can be a great way to reduce the cost of your insurance with very little effort involved. Purchasing your health insurance through Compare the Market in March and paying for the coming year up front has the added benefit of avoiding the annual rate increase that happens every year on the 1st of April.
- Increase your excess – Certain insurance providers will let you increase or decrease your excess level, which in turn affects your policy costs. You can then increase your excess and enjoy a lower premium in return. This is especially a great way to save money if you don’t make any claims against your insurance very often, but be sure to weigh up how often you generally use your insurance with how much you would save.
- Use approved health providers – Most health funds have a certain number of health providers that they work with, which often results in no out of pocket costs when using those services. Contact your provider and ask for their list of preferred providers, and take a look at this list each time you need health treatment.
- Get health cover before you turn 30 – The Australian Government applies a 2% penalty onto all health premiums if you take out cover after you turn 30. This means that if you are nearing the age of 30 and are planning on taking out health cover some time in the future, it might be better to apply for a policy sooner rather than later to avoid being charged the extra 2%.
What have you done to reduce the cost of your health insurance? Let us know in the comments below, and share this post with anyone who could benefit from reducing their health insurance.