Health funds: How to get the best deal

 

Private health insurance premiums are rising for the second time in six months, here are some top tips if you are trying to get a better deal.

 

 

COMPARATOR WEBSITES

 

The first thing you need to know is that using a comparator website like iSelect or Compare the Market might not be the best way to find the cheapest policy.

These comparator website charge health funds commissions that can amount to a sizeable portion of the first year's premium and this helps drives up premiums.

Worse still, these brokers don't actually compare all health fund products and exclude some of the cheapest products you'd want to know about.

Tip one: The most comprehensive health fund comparison service can be found for free on the government website private health.gov.au, it compares all health funds.

 

 

GOLD, SILVER BRONZE CATEGORIES

 

From April 2019 health fund products were classified into a new four tier system of Gold, Silver, Bronze and Basic.

You'd think this meant that Silver policies, which cover less services, would be cheaper than Gold products. WRONG.

Bizarrely, some health funds charge several hundred dollars a year more for silver policies even though they exempt cover for pregnancy or hip replacements.

Tip 2: Make sure you compare the prices of both silver and gold cover to get the best deal.

 

Beware Silver policies can sometimes cost more than Gold. Picture supplied.
Beware Silver policies can sometimes cost more than Gold. Picture supplied.

 

 

 

COMPARE COVER AND PRICES

 

Under the new system all Gold policies have to cover exactly the same procedures but some health funds are charging almost $1300 a year more than their rivals for this level of cover.

Tip number 3: Compare the prices of gold products carefully to get the best deal.

 

 

COUPLE V SINGLE COVER

 

You might think because you are a couple the cheapest and most efficient way to buy health cover is a joint policy. WRONG

It can cost a couple with top cover including pregnancy around $764 a year more to buy a family policy than if the woman buys a single policy covering pregnancy and the man buys a cheaper silver policy that excludes pregnancy.

Tip 4: If one member of a couple needs only basic health cover it can be cheaper for you to ensure as two singles than as a couple.

 

 

EXCESS AMOUNTS

 

Most younger people will never use their health cover and only buy the product to avoid a tax liability.

If you think you won't use your cover consider opting for a higher excess on the policy to cut your premiums.

You can purchase policies with no excess, a $500 excess or a $750 excess (the excesses are doubled for family policies).

Tip 5: Consider opting for higher maximum excess to reduce premiums.

 

 

Check if you are eligible for corporate discounts. Picture: iStock
Check if you are eligible for corporate discounts. Picture: iStock

 

 

HOSPITAL AND EXTRAS COVER

 

Most people buy a combined hospitals and extras policy that covers dental, optical, physio and other allied health care services, without realising to avoid a government tax penalty they need only buy cheaper straight hospital cover.

The premiums for extras cover usually outweigh the benefits you get back and it often works out cheaper to bank the money you would have spent on the premiums for extras cover and use it to self fund your dental and other visits.

Tip 6: If you don't need cover for glasses and massages don't pay for them. Consider self funding this type of care.

 

 

DISCOUNT OFFERS

 

Some health funds offer free dental visits if you use their approved providers, or you can get a discount if you pay via direct debit or pay the whole years premiums in full upfront, some funds offer to provide the first months cover for free saving you money.

Tip 7: Look out for discounts and free care.

 

 

CORPORATE DISCOUNTS

 

Most health funds offer special deals to workers employed in large organisations that can save you up to 10 per cent on the cost of your premiums.

Top 8: Check with your company to see if any of the big funds offer employees discounted corporate health cover.

 

Originally published as Health funds: How to get the best deal



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