Planning: 10 tips to save on your private health insurance costs

Credit - Science News

The male seahorse* might need pregnancy cover, but do you? 10 tips to save on your private health costs…plan to enjoy your spend somewhere else!

We’re writing about private health insurance because of a few things that have happened recently…this is all true!

• One of my clients was reviewing her annual private health insurance spend, and wondered whether or not to continue with pregnancy cover extras - they hadn’t decided on whether to try for another baby. She decided to keep pregnancy cover (as a just in case) and dropped their infertility cover.

Outcome: lower costs of cover

• Later that week, when we were reviewing private health premium costs for another client, we discovered that their policy also included pregnancy cover. However in this case, it was for a 55-year old man! Given that this man is not a seahorse - which happens to be the only species on Earth where the male gets pregnant - pregnancy cover was completely unnecessary!

Outcome: even lower costs of cover

• Yet another client didn’t know that they could save on premium costs by paying in advance, before private health funds routinely increase their fees on 1 April each year.

Outcome: even lower costs of cover

Please note: This year is different: some funds are pushing back their increase to commence later on this year…up to 1 November 2022 for some funds (details below) **

So if you've decided that private health cover is for you, here are 10 tips to help you keep your costs under control.

1. Timing is everything!

Check out the details of what you are covered for, and work out and make any relevant changes. For example, you may need:

• better hospital cover (for elective surgery, like cataracts);

• less extras (your kids don't need cover for dental braces anymore); or

• less cover altogether (if children are leaving home).

Shop around for a better deal and to check out what you can be covered for, check out the private health comparator.

2. Discounts

Some Private Health Funds will offer a discount for:

• early payment; or

• direct debit

Check out what your fund is actually offering.

3. Advance payments

If you pay your premium 12 ( and possibly 18 months in advance in 2022) , you could save on the annual 1st April fee increase. If not, you will be locked into higher rates. You need to pay the day before renewal day at the latest. i.e. Pre-pay your premium for 12-18 months the day before their deferred 2022 premium increase date. Some funds only allow 12 months to be pre-paid, but some allow 18 months.

Important: For lower costs, check the date of the fee increase. If it’s a weekend date, make sure you pay by the Friday before! Otherwise you’ll be up for the higher premium.

4. What's your income?

Depending on how much you earn, if you are not covered by private health insurance you're going to have to pay an additional 1% - 1.5% tax towards the Medicare Levy Surcharge (MLS). (Base income threshold is $90,000 for singles and $180,000 for families).

Note this is payable for every day you don't have insurance within a financial year and is on top of the 2% Medicare Levy.

5. How old are you?

If you don’t take out private cover, the Lifetime Health Cover loading kicks in - this adds 2% loading to your premium for every year you don’t take out cover, after age 31.

6. Check out the excess

Just as you have an excess on car insurance, you may be able to opt for a higher hospital cover excess, and save on premium costs.

7. Is there an excess for extras?

An excess may also be there for extras cover- some funds let you choose a percentage fee refund i.e. higher cost extras can mean a bigger percentage refund.

8. Corporate membership

Some employers and organisations offer a health insurance policy that they partly, or fully fund, for the benefit of employees. Which means lower costs for you.

9. Check out the fine print

Insurers have many different deals, waiting times and plans for what is covered. The costs may look attractive, however older policies are often more generous.

10. Customer service

This is all important if you or your family are unwell. It’s really worth it to know that your insurer is there for you at a time when you absolutely need it!

Next steps:

Call us for a quick chat or drop us a line for help with saving on your private health insurance costs and getting your money working for you.

* The Conversation: The secret sex life and pregnancy of a seahorse dad.

** These are the funds we know are deferring their fee increase from 1 April 2022: Medibank, together with its subsidiary AHM, Nib, Teachers Health, UniHealth, Nurses & Midwives Health, HCF. You need to confirm details with your current or intended health insurance fund.

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