How to switch health insurance

TAMIKA SEETO
Finance Journalist · 12 April 2021
The cost of private health insurance in Australia rose on 1 April, marking the second time most insurers’ premiums have increased in six months. If you are thinking about changing funds, here’s what you need to know before you make the switch.

Health insurance premiums increased by an average of 2.74% on 1 April, 2021. For some members, the jump was as high as 5.47% on average. With this in mind, now might be a good time to review your health insurance policy and consider switching if you’re not happy with your current policy or fund.

When choosing health insurance, consider factors such as the coverage, waiting periods, price (premiums and excesses) and your personal needs. Once you’ve compared policies and found one that suits your needs, you can then make the switch.

How do I switch health insurance?

Your new insurer can typically handle the transfer for you. You’ll need to provide it with the details of your old insurer. Your new fund can then contact your old fund and request to cancel your old membership.

Your old insurer will need to provide a transfer certificate to your new insurer. This will include information about your previous type and level of cover, waiting periods and your claims history. Your old fund is legally required to provide the certificate within 14 days.

If you have direct debits set up with your old health insurer, remember to cancel these once you have switched to your new fund. Most insurers also offer a 30-day cooling-off period. This means that if you change your mind within 30 days of joining the new fund and haven’t made any claims, you can often ask for a refund of any premiums you have paid.

Can I switch health insurance at any time?

Yes, you can switch your health insurance at any time. If you’ve paid any premiums in advance, your old health fund should refund you for the rest of the year’s cover when you change funds.

In some cases, it may be beneficial to switch your health insurance ahead of the annual increase, which usually occurs on 1 April each year. This is because many health funds allow you to pay your premiums in advance. One benefit of pre-paying is that you often can lock in current premiums before the 1 April increase. The potential savings will depend on how much your new provider is increasing its premiums by. A handful of insurers also offer a discount if you pay your premiums in advance.

The table below displays some of our referral partners’ hospital and extras policies for a 39-year-old single female seeking cover in NSW without pregnancy cover. The table is sorted by Star Rating (highest to lowest) followed by provider name (alphabetical). Use Canstar’s health insurance comparison selector to view a wider range of policies. Canstar may earn a fee for referrals

Do I have to re-serve waiting periods?

If you switch to a policy with the same or a lower level of cover as your previous policy, you typically won’t need to re-serve the waiting periods you have already completed. However, waiting periods may still apply for any new or added services or benefits under your new policy. You may also need to serve any waiting periods that you didn’t complete with your old insurer. Depending on the insurer, you may also need to serve the waiting periods again if there is a gap between the end of your old policy and start of your new cover.

What happens to my annual limits on extras?

It’s important to check with your new insurer how any annual limits will work when you change your extras policy or a combined policy that includes extras cover. Annual limits are the maximum amount you can claim back on extras (services such as dental, optical and physio) each year. According to the Private Health Insurance Ombudsman (PHIO), when you change funds your new insurer can reduce any annual benefit limits by the amount you have already claimed for the applicable extras under your previous policy that year.

Also keep in mind any lifetime limits that may apply. These are the total amount you can claim for a service in your lifetime across insurers. Lifetime limits often apply to services such as orthodontics. If you’ve already claimed up to your new policy’s lifetime limit, you won’t be able to claim any further benefits for these services.

Does switching health insurance affect my Lifetime Health Cover (LHC) loading?

Changing health insurers should not affect your Lifetime Health Cover (LHC) loading status, provided you maintain a hospital policy. The LHC loading applies a 2% increase to your hospital premiums for every year after your 30th birthday that you don’t take out hospital cover, up to a maximum loading of 70%. To cover gaps, such as when you are switching from one insurer to another, you are allowed to be without hospital cover for a total of 1,094 days (three years minus one day) during your lifetime without it affecting your LHC loading.

Will I get to keep any loyalty bonuses or discounts?

Loyalty bonuses usually do not carry over to the new insurer, the Ombudsman says. However, it may be worth checking with your insurer to see if it is possible.

Your old insurer may have also offered you a discount, such as an age-based discount for people aged between 18 and 29. For age-based discounts, insurers can choose whether they will be honoured if you switch products or funds. It’s a good idea to check about this and other discounts before changing insurers. Some insurers also offer sign-up discounts for new members.

Switching health insurers can be a fairly pain-free process, but it’s important to do your research before committing, to help ensure you find a policy that suits you.

Cover image source: Jacob Lund/Shutterstock.com


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This content was reviewed by Sub Editor Tom Letts and Finance and Lifestyle Editor Shay Waraker as part of our fact-checking process.


Tamika covers personal finance for Canstar, specialising in banking and general insurance. She joined the team after completing a Bachelor of Journalism and Bachelor of Laws (Honours) at QUT. She has previously written for a range of news, music and arts publications.

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