So, how much value are you really getting from your health cover? Now is the perfect time to ask.
I reviewed my health cover late last year, saving myself a whopping $790 a year by dropping down a level on my hospital cover and increasing the excess on the policy (which we’ll get to).
So, here are my top tips for saving money on your health insurance premiums.
Don’t pay for hospital cover you don’t need
Have you finished having children but still paying for obstetrics? Are you a fit and healthy 35 year old but paying for hip replacements and obesity surgery?
Hospital cover used to come in a confusing array of options. Now, the government has streamlined all policies into Gold, Silver, Bronze and Basic.
You only need basic cover to avoid the cost of paying the Medicare Levy Surcharge, which is the only reason many higher-income earners have insurance in the first place.
Ask your insurer for a policy inclusions list for each policy and make sure you only have cover for things you might reasonably need.
Review your extras claims
You don’t need extras cover to avoid paying the Medicare Levy Surcharge, only an eligible hospital policy.
The best way to figure out if you’re getting value for your cover is to review your claims for the previous calendar year.
Login online or ask your insurer to provide you with a list of claims. When I did this, I found I had received $593 in benefits for the $234 in premiums I paid. So, I’m keeping that. I claim heavily on dental and optical, because I wear contact lenses and love my pearly whites, but are you getting more back than you pay? If not, drop it.
Beware: they will ask for your phone number and they will call you almost immediately. That’s ok. Health products are so confusing, you may be better off talking to a human. Just don’t feel pressured to go with any recommendation they come up with. Say you need to sleep on it and walk away.
You can also use the government’s website, privatehealth.gov.au. It compares all insurers, unlike the commercial comparison websites, but to be honest, it’s a bit clunky.
When I spoke to a comparison company this week, they said they couldn’t do any better than the policy I’m already on. Winning!
Use the webchat feature
Most big insurers have a pop-up webchat feature on their websites to take pressure off their call centres. I love these!
It’s so much easier to cry poor, ask clearly for what you really want and threaten to walk away over text (just ask my ex-boyfriends…)
Typing also overcomes any potential language barriers you might encounter with a call centre and enables you to multi-task.
I had a webchat with my insurer this week, and while I’m already on the cheapest cover that suits my needs, I did score a $50 optical voucher just for making a bit of noise. Your opening line should just be: “I’m looking to save money – can you suggest ways to reduce my premiums?”
Increase your hospital cover excess
Your “excess” is what you pay out of pocket in the event you make a claim. Most insurance policies have them, and the more you agree to pay, the lower your ongoing premiums.
Last year, the government increased the excess allowable on hospital cover policies to $750 for singles and $1500 for families. Of course, in the event you do have a claim, you’ll pay more. But the lower premiums you pay in the meantime are likely to save you that, and more.
According to the Australian Bureau of Statistics (ABS), insurance cover is the biggest component of most household health budgets.
The average household spent $2005 on health insurance premiums in 2015-16. But fewer than half of Australians have private cover, so the average cost for those with cover is much higher.
When assembling a budget for health expenses, it’s also important to consider out-of-pocket costs on GPs and other medical specialists, which add up to an average of $1250 a year per household. Then there’s an average spend of $880 per year on medicines, vitamins, ointments and lotions.
In the spreadsheet I’m building, I’m also including gym fees in my “health” section. The ABS classifies such fees as “recreation”, but I’m more than convinced the money I spend on staying fit will reduce my health bills in years to come.
Until next week, stay healthy and stay safe.
Follow Jess’ journey on Instagram at @jess_irvine_pics or email her your money saving tips to firstname.lastname@example.org
Jessica Irvine is a senior economics writer with The Sydney Morning Herald.