5 Ways To Save Money On Health Insurance

14 March 2018

Originally published by TJ Ryan, March 3, 2017

Health insurance premiums will rise by 3.95% on April 1st in 2018, according to Federal Health Minister Greg Hunt. While this is actually the lowest annual rise in 17 years, it still represents a fairly significant increase, so it makes sense to ensure that the health insurance policy you have offers good value for money. Remember, if you lock in your premiums before the 1st of April, then you won’t have to pay the increased premiums for an entire year!

Choosing a health insurance policy can seem difficult, with several dozen insurers to choose from, each providing many different products. With the cost of health insurance consistently rising at a rate above inflation, reducing your premium wherever possible (without compromising on value) is a great idea. Here are our top tips on how to shave money off your health insurance premiums.

The table below displays a snapshot of 5-Star hospital & extras policies on Canstar’s database with links to providers’ websites, sorted by provider name (alphabetically). Please note the results are based on a couple aged under 35 in NSW, with no pregnancy cover.

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Cost of health insurance

The cost of private health insurance will depend on the specific health insurance fund and policy you choose, as well as how many people are to be insured under that policy. As a general indication, Canstar has calculated the average premiums across the health policies assessed for its 2017 Star Ratings, based on a combined hospital and general package, as follows:

2017 Health Insurance Premiums – Hospital and Extras Packages

Young Singles – Female $2,097 $1,411 $2,105 $2,013 $2,023 $2,181 $1,985
Young Singles – Male $2,097 $1,411 $2,105 $2,013 $2,023 $2,181 $1,985
Young Couples – Non Obstetrics $4,210 $2,827 $4,226 $4,053 $4,080 $4,380 $3,971
Young Single Parents – Non Obstetrics $3,863 $2,589 $3,816 $3,626 $3,774 $4,015 $3,727
Young Family – Non Obstetrics $4,301 $2,880 $4,319 $4,138 $4,155 $4,467 $4,117
Couples and Families – With Obstetrics $3,945 $2,910 $4,003 $3,869 $3,919 $4,007 $3,708
Established Singles – Female $2,363 $1,638 $2,403 $2,271 $2,286 $2,454 $2,260
Established Singles – Male $2,363 $1,638 $2,403 $2,271 $2,286 $2,454 $2,260
Established Couples $4,699 $3,243 $4,777 $4,519 $4,559 $4,892 $4,481
Established Single Parent $4,186 $2,879 $4,191 $3,931 $4,099 $4,373 $4,041
Established Families $4,670 $3,197 $4,754 $4,476 $4,505 $4,862 $4,479
Mature Singles $2,587 $1,851 $2,609 $2,465 $2,522 $2,644 $2,479
Mature Couples $5,162 $3,699 $5,213 $4,937 $5,058 $5,290 $4,959

Based on packaged cover policies considered for 2017 Canstar Health Insurance Star Ratings. Premiums include Base Tier Australian Government Rebate of 25.934%. “Mature” profile only includes products that include cover for cardiac and hip/knee replacements. “Established” profile only includes products that include cover for cardiac.


Canstar’s 2017 Health Insurance Star Ratings report assessed the price and features of more than 23,000 policy and premium combinations from 21 providers, across nearly 500 consumer profiles that cover various demographics across the states and territories in Australia. Find out more or search for great value health insurance policies on our website:

How can I save money on health insurance?

Here are some tips for saving money on health insurance:

  • Pay only for what you need
  • Know what you’re likely to claim on in the future
  • Pay a higher excess
  • Avoid Lifetime Health Cover loading
  • Compare providers

1. Pay only for what you need, and review your policy regularly

It makes no sense to pay for obstetrics and IVF if you are in the mature stage of your life. The same applies to a young person paying for treatment more common for older people. Look closely at policies to find one that best suits your needs at your stage in life.

2. Know what the most-claimed health services are

Similarly to only paying for what you need, saving money on health insurance could be as easy as planning ahead and only having cover for the benefits you are most likely to claim on.

Hospital Cover:

Around 45.6% % of Australians have a Hospital health insurance policy – roughly 1% less than this time last year (APRA, December 2017). For hospital claims, cardiac episodes, knee replacement, and hip replacement are three high-claim areas. Perhaps not surprisingly, the age group for which most hospital benefits are paid is between 60 and 79 years old.

So in terms of policy inclusions, ensure that you have those at a minimum – and whatever else your family history indicates you might need. Bear in mind that your needs will change as your life progresses, so it’s important to review your policy regularly


Extras Cover:

According to APRA, at the end of December 2017, around 55% of the Australian population is covered by an Extras health insurance policy. But do you know if your policy is giving you good value?

It’s easy to be dazzled by “benefits” such as massages or gym membership rebates when you’re choosing an extras policy. But be aware that the most commonly claimed extras items are dental, optical, physiotherapy, and chiropractic. At a minimum, try to find an extras policy that offers great value cover for those four benefits.


3. Pay a higher excess or co-payment

You can lower the premium on your private health policy by opting to pay a higher excess. Keep in mind, though, that the higher your excess now, the more cash you will have to pay later if you are admitted to hospital.

It really depends on how often you claim on your policy and whether this would be a problem for your budget. This strategy may well suit a young, healthy person who does not envisage regular trips to hospital, whereas an older person may not want to take that risk.

4. Avoid Lifetime Health Cover loading

Saving on health insurance could be as easy as taking out a basic level of Hospital Cover policy before you turn 30. Whether you’re fit and healthy right now or not, the savings could be worth it further down the track.

Anyone joining a health insurance fund aged 30 or younger pays the base premium on health insurance because they have what’s called Lifetime Health Cover (LHC). Anyone joining after age 31 pays a premium that is 2% higher for each year over age 30 that they went without cover, called Lifetime Health Cover loading.

Specifically, the deadline to join a health fund and avoid the LHC loading is the 1st of July following your 31st birthday – or for new migrants aged over the LHC cut-off, within 12 months of being registered for Medicare.

5. Shop around!

When you’re looking for a doctor for yourself or your family, you don’t pick the first one you see – so don’t pick the first health insurance policy you hear about.

You will be surprised what you find when you compare policies. You may get the same cover for less or more cover for the price you are currently paying. As with anything financial, it pays to keep tabs on what’s happening in the market, as nothing stays the same.

Keep in mind that saving money on insurance is not all there is to it. The cheapest health insurance policy is highly unlikely to be the best – that’s why here at Canstar, we compare health insurance based on price and features. Use our health insurance comparison page to filter the products according to your health needs and budget needs.

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