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Money Hacks

8 tips to save on your health insurance 

Financial Wellbeing Coach

2022-04-14 00:00

Estimated reading time
5 min

In this article

  • Get the best deal by comparing your health insurance
  • Hints and tips for saving on your policy
  • Being prepared for payments through budgeting

When you look at ways to save money you probably think about cutting down on eating out or reassessing how many streaming sites you’re signed up to. But have you factored health insurance into your plan?

Each year, health funds review their premiums to determine a government-approved percentage increase or decrease to cover changes in benefits costs. While the amount varies year on year, a premiums rise can still impact your overall budget. So, we’ve put together some hints and tips to help you make smart savings when it comes to your health.

  1. Shop around and compare policies

  2. There are many different health insurance policies available to Australians, so shopping around and comparing the different plans is the best way to get a good deal. While it may seem like a daunting task, there are tools that you can use to make life easier.

    A great place to compare all private health insurers is on the Australian Government's website. Read through each policy's product disclosure statement (PDS) to understand the inclusions and exclusions and which extras are right for you.

    Typically, health insurance premiums rise in April, meaning the best time to shop around for a policy is the peak period of February-March, as health funds are trying to win over new customers by offering a range of bonuses and incentives before the premium increase.

  3. Pay in full before the price rise

  4. Many health insurers allow you to pay 12 months up-front at the previous year’s rate if you pay before the increase. Called ‘locking in your premium’ this is a good way to save money as you’re essentially delaying having to pay the increased premiums for a whole year.

    But before choosing to lock in your premium, check how your monthly budget will be affected as you’ll be paying a large chunk of money in one go. And remember to confirm with your insurance provider the latest date you can pay before the cut off.

  5. Split your health cover

  6. There are two types of health insurance: hospital and extras (for things like physio and dental). By splitting your health insurance between two providers, you can sometimes get better value premiums or coverage than taking out combined cover with the one provider.

    It’s also a good idea to review your hospital cover and extras cover separately and make sure it includes all of the things you actually need. For example, if you’ve recently completed braces treatment or had a baby and aren’t planning on having another in the near future, you’ll want to remove those features from your plan. But remember, if you do remove coverage for a service, waiting periods might apply when you take it out again so always good to check.

  7. Avoid paying out-of-pocket expenses

  8. Did you know that even if you have private hospital cover, some patients may still have to pay out-of-pocket expenses? Also called ‘The Gap’, this is the difference between what Medicare and your private health fund will pay towards your treatment, and what your specialist doctor or hospital charges. These hidden fees can pop-up when you least expect them, but there are sometimes ways to avoid these. Ask your insurance provider about which healthcare services it has gap cover arrangements with, and research doctors who don’t charge gap fees. Remember to check all doctors involved with your treatment, including anaesthetists!

  9. Budget for your payments

  10. Whether you select a basic or comprehensive plan, or choose to pay monthly or in full, budgeting for your health insurance payments is key to ensuring your overall spending stays on track. A handy way to do this is to use a budgeting tool like the ANZ free budget planner. It only takes about 10 minutes to complete and will give you a clear view of your finances and what you can afford to pay.

  11. Under 30? Now could be the best time to take out hospital cover

  12. If you haven’t yet turned the big 3-0 then good news! You could be in for some pretty decent savings. If you take out private hospital cover between the ages of 18-29, you’ll get a 2% discount off your premium every year you're under 30. And if you stay on that policy, you’ll keep getting the discount until you turn 41.

    If you don’t have cover by 1 July following your 31st birthday, you might have to pay Lifetime Health Cover (LHC) loading in addition to your premium. This is a government initiative to encourage people to take out private hospital cover earlier on in life. So, for every year you delay, you’ll be charged an extra 2% loading on top of your premium when you do take out a policy.

  13. Avoid the Medicare surcharge

  14. The Medicare Levy Surcharge (MLS) is a tax-time surcharge the federal government charges high income earners who don't have hospital cover. It’s designed to encourage people to use the private hospital system and reduce demand on the public Medicare system.

    If you're a single person earning over $90k or a couple or family earning over $180k, then you may be liable to pay the MLS. So, if you are on a high income, it may be cheaper to buy health insurance than pay the surcharge. It’s a win-win situation, you get to have hospital cover, plus you may pay less at tax time!

  15. Piggyback off your parents' policy

  16. This is another great way to save money for those under 31! In 2021 the government gave the go-ahead for health insurance to increase the age that dependents can stay on a family policy from the age of 24 to 31, lining up with the cut-off that LHC kicks in. Obviously, you’ll have to get permission from your parents to stay on their policy (or be added back on) but it’s great short-term solution for saving on your health insurance. Do check your parent’s policy as your income or where you live can impact your eligibility.

8 tips to save on your health insurance 
Financial Wellbeing Coach

Ready to factor health insurance into your budget?

Now that you’re equipped with all the savvy ways to save on health insurance, it’s time to include it in your financial plan!

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The information set out above is general in nature and has been prepared without taking into account your objectives, financial situation or needs. Before acting on the information, you should consider whether the information is appropriate for you having regard to your objectives, financial situation and needs. By providing this information ANZ does not intend to provide any financial advice or other advice or recommendations. You should seek independent financial, legal, tax and other relevant advice having regard to your particular circumstances.

Australian Government, Commonwealth Ombudsman. ‘Comprehensive, Independent Private Health Insurance Information’,