Paying for health insurance can be a pinch in the pocket for the undiscerning subscriber. With rising costs in everyday items like petrol and groceries, additional expenses on other essentials such as health insurance premiums can take a toll on our pockets. Don’t be disheartened as there are ways you can adopt to save money on private health insurance.
1. Receive a Government Rebate
You can save up to 25% on your hospital and extras premiums with the Private Health Insurance Rebate made available by the Australian Government. If you’ve aged between 65-69, the rebate increases to a maximum of 30%. For those who are aged 70 or over, it is a maximum of 34%.
2. Lock in the cheapest premium
If you take out hospital cover before 1 July following your 31st birthday, you can take advantage of paying the cheapest premium. Lifetime Health Cover penalises people who take out health insurance later in life, by adding a 2% age loading for every year without health insurance after the age of 30. Hence, purchasing a health insurance later in life will cost you a hefty sum. Special conditions, however, apply to new migrants who were overseas at the time of their 30th birthday and those born before 1 July 1934.
3. Reduce your premium with an Excess or Co-payment
You can reduce your premium by opting for an excess or co-payment on your health insurance policy. This means that you agree to pay part of the cost if you’re admitted to hospital. This option applies to those who are fit and healthy and who don’t see themselves needing hospital services anytime soon.
4. Cutting medication costs
Medication costs can be reduced through the purchase of generic medicine. Alternatively, you can ask your doctor to prescribe a less expensive brand or ask your pharmacist for a cheaper equivalent as long as the box marked ‘brand substitution not permitted’ hasn’t been ticked on your prescription.
5. Adopt a healthier lifestyle
It is a known fact that smokers or the obese generally pay higher premiums based on their susceptibility to health risks. Hence, if you quit smoking, you will become a more desirable candidate for insurance coverage. Getting fit and adopting a healthier lifestyle will benefit your wallet in the long run and improve the chances of your living longer.
6. Pay upfront
To ensure that the health funds are able to fulfill their obligations to their members, premiums are increased annually around the beginning of April by around 5% with the approval of the Minister for Health. If you pay your annual health insurance premium upfront, you are able lock in the previous year’s rate for the next 12 months, thereby saving money.
7. Pay by Direct Debit
Many insurance companies offer a discount for paying monthly premiums by Direct Debit. For example, Nib gives a 4% discount for direct debits paid from a cheque or savings account, ensuring that those who are not in the position to pay upfront can still take advantage of discounts and savings.
8. Trim the Extras
Save on premiums by forgoing the extras if you think you don’t need it. Extras in insurance cover include physiotherapy, dental and optical benefits and health club memberships. Keeping the options on the types of treatment to a minimal in the extras cover reduces your premium. In other words, you should tailor the package to your needs so you aren’t paying for what you don’t need. Alternatively, you can also take extras cover with a different insurer from our hospital cover insurer to cut costs. Compare premiums across different insurers to ensure you are getting the best deal.
Taking up the above measures will help you cut down your expenses on health insurance premiums in the long run. While private health insurance is essential in helping us meet our health needs over and above that of Medicare, we must also ensure that we don’t end up overpaying for the services we are entitled to.