5 ways to save money on your health insurance premiums

Health insurance premiums typically rise in April, and this year is no exception. The government has approved an average industry premium increase of 3.73% – the largest increase since 2018.

Canstar crunched the numbers and found that on an average-priced gold hospital policy, a 3.73% increase could raise a single person’s annual premium by $110 and a family’s by $217.

Some funds hiked up their premiums more than others. Members of Police Health are facing the biggest average increase, with premiums rising by 9.56%. At the other end of the spectrum, Health Insurance Fund of Australia only increased its premiums by 1.91%.

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When looking at Australia’s biggest funds, four out of five are increasing premiums by more than the average.

• nib: 5.79%
• Bupa: 5.10%
• HCF: 4.95%
• Medibank: 3.99%
• hbf: 2.80%

“This will be a bitter pill to swallow for households across the country who are already shelling out thousands of dollars a year for their health insurance,” says Canstar’s data insights director, Sally Tindall. “The knee-jerk reaction for many households might be to reduce or drop their health insurance cover – but know there are options before you go nuclear.”

So, how you can you save money on health insurance? Here are five strategies that could help you save on  premiums.

Review your cover

One of the simplest ways to save money is to make sure you’re only paying for what you need. “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 Ms Tindall.

If you’re not sure where to start, consider giving your health fund a call for some guidance. Together, you can work out what you may be able to remove and what you should keep. You’ll also be able to get a good idea of how much you could save by making the changes to your cover.

Shop around for a better deal

There can be a big difference in premiums between providers, so shopping around for a better deal is always a good idea. As Ms Tindall points out, “Some people could see the cost of their health insurance go down, rather than up, even after the 1 April changes, without having to sacrifice on cover, just by switching.”

To give you an idea, Canstar research shows that the cost of a silver-tier hospital policy for a single person in NSW ranges from $1,375 to $1,757, which means you could potentially save as much as $383 (22%) by switching.

You may also consider “mixing and matching” when you’re shopping around. You may find it’s cheaper to use one provider for hospital cover and a different one for extras rather than getting both types of cover through the same provider.

“What’s important to remember in the switching process is that if you are moving to a policy that offers the same or a lower level of cover as your old one, you won’t have to serve any extra waiting periods,” explains Ms Tindall.

As well as a cheaper premium, you might even be able to score other benefits by switching. Many providers offer sign-up incentives, which can include a certain number of weeks of free cover, cashback or rewards points. These are worth keeping an eye out for.

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Opt for a higher excess

Choosing a higher excess can be another way to bring down your premium – the higher the excess, the lower the premium is likely to be. Of course, it’s important to keep the excess at a level you’re confident you’ll be able to afford if you need 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.

Pay in advance

Most providers will let you pay a year’s premiums in advance and lock in the pre-April 2025 price. Depending on your cover, this could mean forking out thousands of dollars, though.

Even if you have the cash available, Ms Tindall suggests you consider “whether this cash might be better off elsewhere in your finances for this time”. For example, you may be better off adding the money into your offset account or making an extra repayment on your personal loan.

Pay by direct debit

Saving money on your health insurance could be as simple as arranging to pay your premiums by direct debit. Canstar’s research shows that almost half (43%) of providers will give you a discount for paying by direct debit. Ms Tindall points out that some come with conditions, so it’s important to read the fine print to make sure you receive the discount.