How to negotiate health insurance?

Can you negotiate health insurance?

While you may not necessarily be able to haggle over the price of your health insurance, it never hurts to ask for a discount. The private health insurance industry in Australia is quite competitive, so if you find that your provider is no longer offering you good value for your money and is unwilling to budge on the price, it may be worth looking elsewhere.

Tips for negotiating a better deal for your health insurance

If you’re looking for ways to save on your health insurance, such as by perusing health insurance deals, understanding what you’re being covered for can help:

1. Hospital tiers

We can get caught paying higher insurance premiums for hospital services we may not need anymore through what is referred to as the “lazy tax”. This can be especially true when it comes to the different private hospital insurance tiers.

There are four main tiers of hospital cover in Australia—Gold, Silver, Bronze and Basic—and insurers have the option to add a “Plus” category for Silver, Bronze and Basic, allowing additional coverage for certain medical treatments. With so many choices, it’s important to think about what medical services you need right now, as well as those you’ll need in the future.

“Are you still paying for pregnancy and birth-related services when your kids are in high school? Or have you picked up a new sport that might put you at higher risk of injury? A quick review can help you cut out what you don’t need and ensure you’re covered where it matters,” explains Canstar’s Data Insights Director, Sally Tindall.

It’s important to note, however, that waiting periods for coverage will apply for certain medical procedures, so if you eventually want to move back to a higher hospital tier you’ll typically need to serve out a waiting period before being able to claim. Fortunately if you’ve already served waiting periods for a particular hospital tier these will carry over. This is also the case when moving from one health insurance provider to another.

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2. Your hospital excess

When making a claim you’ll usually have to pay your policy’s excess. This may come in the form of an upfront payment or be taken out of the payout from your insurer after the claim has been approved.

If you opt for a higher excess amount (e.g. $750 rather than $500 or $250), you’ll often be given lower premiums. It’s important to consider if you’ll be able to afford this higher excess amount when the time comes to make a claim.

According to Ms. Tindall, “This type of fine-tuning doesn’t typically result in big savings, so it’s worth doing your sums to make sure the savings are worth it.”

Generally speaking, you only need to pay your policy’s excess once per policy member per calendar year to access your private hospital coverage. This may differ between providers, so it’s worth checking to see how the excess payment works for your policy.

3. Extras cover

Extras cover can help pay for specialist services, tests and some medications that are not part of an in-hospital visit and are not covered by Medicare, such as treatment by a dentist, optometrist or physio.

Unlike hospital cover, health funds can set their own limits on what extras they cover (as long as it’s within industry guidelines).

Basic extras cover will typically include general dental, physiotherapy and optical (depending on the provider), whereas top level extras may also include orthodontics, non-PBS pharmaceuticals, chiropractic and osteopathy services, podiatry, hearing aids and psychology.

If you require extras services then comparing your options can be crucial to ensure that you’re receiving value for money. For example, if you have teenagers who may need braces in the near future, then taking out a policy that covers orthodontics may be helpful. Waiting periods will apply for certain treatments, but many providers offer to waive the two and six month waiting periods when you sign up to a new policy.

4. Compare your options

Comparing your health insurance options is a good idea. The first place to start may well be with your current provider. Give them a call and see if there’s any discounts or offers you’re missing out on. This could also be a chance to discuss your current health insurance needs and may lead to you being matched up with a policy that better suits you.

If you have no luck negotiating with your provider, you can compare your health insurance options with Canstar. By using the simple comparison tool, you could find a policy that better suits your healthcare needs while also saving you money. To give you an idea, Canstar Research shows the cost of a silver-tier hospital policy for a single person in New South Wales (NSW) ranges from $1,445 to $1,859, which means you could potentially save as much as $414 (22%) by switching.

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