It’s that time of year when rising health cover costs make headlines, and sure enough, from April 1, health insurance premiums are set to rise by 3.05 per cent.
According to comparison site Finder, families pay an average of $392 per month for health insurance, and it’s unlikely premiums will fall any time soon. The problem is, health insurance isn’t one of those products you can walk away from and pick up again later in life. Fund members are only allowed up to 1,095 days without cover before loadings apply if you want to rejoin.
This can make it worth looking at ways to save on premiums rather than opting out altogether.
An important step is to go through your policy to see if you’re paying for inclusions that aren’t relevant. Be prepared to think outside the square. If you have a couple’s policy, it could be worth taking out two single policies if only one of you requires top hospital cover. The same applies to extras: one person may want major dental cover, while the other may rarely need a dentist.
A smart move is to check if you could get a better deal by switching to another fund. This involves some hassle and paperwork, but we tend to stick with the same health fund for an average of 12 years, so there’s a good chance you could save by shifting to a different fund. You shouldn’t have to re-serve a waiting period if you transfer to a policy with the same or a lower level of cover.
Take a look at privatehealth.gov.au to compare different funds, or to know if you’re eligible for a restricted membership fund.
Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.