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How to get the same health insurance cover for less

Paying too much? Switching to a cheaper comparable policy could save you up to $1578.

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Last updated: 22 June 2020

Need to know

  • All comparable Gold, Silver and Bronze policies give you exactly the same level of cover, so it's worth comparing deals.
  • We've calculated you could save up to $1578 by switching to a cheaper comparable policy.
  • Consider Plus policies if you need a little more cover - but take care when choosing Silver Plus policies as some cost more than cheap Gold policies.

As the end of the 2019/20 financial year rolls around, it's a good time to take stock of your expenses. 

Health insurance costs are one of the biggest causes of financial stress, so if you can find a way to ease that burden a little, it'll be worth the effort. 

Our health insurance experts have been busy crunching the numbers on hospital cover, and we've found that you could save yourself some serious money if you shop around for a better deal. 

Here are three ways you can save money on your private health insurance without sacrificing cover:

  1. Switch to a cheaper Gold, Silver or Bronze policy
  2. Consider a Plus policy if you don't need the full cover a Gold or Silver policy provides
  3. Take an excess on your policy to reduce your premium

We'll explain how and give you examples of how much you could save. 

How you can save by changing your hospital cover provider

Here's a secret that the health insurance companies probably won't tell you: there's pretty much no difference between the cheapest Gold policy and the most expensive. Same for Silver and Bronze. It might seem too good to be true, but if you have a Gold, Silver or Bronze policy you may be able to find a cheaper deal that'll give you exactly the same level of cover, just for less money.

That's because every hospital policy must cover exactly the same procedures and treatments: every Gold policy covers the same things, as does Silver, Bronze and Basic.

There's pretty much no difference between the cheapest Gold policy and the most expensive

When the government overhauled the system back in 2018, they introduced four tiers of hospital cover (Gold, Silver, Bronze and Basic). Unlike extras policies, hospital policies cover you for in-hospital treatments and surgeries, and each of the tiers covers a specific list of treatments and procedures, with Gold covering the most and Basic covering the least. 

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Want to find the best cover for your needs at the cheapest price? You can compare all policies (with no sponsored results!) in our health insurance comparison tool.

So if you're paying top dollar for the most expensive Gold policy on the market, you're not actually getting any more coverage than if you were paying for the cheapest Gold policy. (It's the same for Silver and Bronze, too.) So it makes sense to find out if there's a less expensive policy available and save those dollars for something more enjoyable than health insurance! 

Of course, price and cover are not the only factors in choosing a health insurance provider, our comparison tool also compares on gap cover, complaints about the fund and hospital agreements. 

"Shopping around has become more important than ever," says CHOICE health insurance expert Uta Mihm. 

"Decide on the category you need (Gold, Silver, Bronze, Basic) and find the cheapest policy in that category – it can easily save you hundreds of dollars."

How much you can save on your Gold, Silver or Bronze hospital policy

When our health insurance experts did the maths, they found that you could save as much as $1578 per year on hospital cover by switching to a different policy – without losing any cover. 

On average across Australia, people with Gold policies could save $932 per year by opting for a cheaper policy. For Silver, it's $576 on average. And for Bronze policies, you could save an average of $435. It's not exactly peanuts, so it's worth checking out what other policies are out there. 

People with Gold policies could save up to $1578 per year by opting for a cheaper policy

Health insurance in Australia is confusing, and costs vary from state to state. So we've broken the savings down by cover and state so you can see how much you could save. 

How much you can save with Plus policies

Aside from the Gold, Silver, Bronze and Basic policies discussed above, there are also plenty of 'Plus' policies on the market: Silver Plus, Bronze Plus and Basic Plus. These cover all the same things as the equivalent policies, plus some additional therapies. 

So if you don't need a full Silver policy but want a little more than a Bronze policy, a Bronze Plus policy could be a good option. 

'A smart choice'

"While all therapies have been ordered in Gold, Silver and Bronze categories, Plus policies can be a smart choice," says Uta. 

"If you don't need hip replacements, cataract surgery, pregnancy or any other therapy in the Gold category, for example, a Silver Plus policy that includes full cover for rehabilitation (in case you have an accident) can save you money while still giving you the right cover for your needs.

"If a Bronze policy provides all the cover you need but you also want a specific service like wisdom teeth removal, choose a Bronze Plus policy that covers it."

Bronze Plus policies can vary widely, with some only offering one service above Bronze, such as sleep studies, and others covering important services like lung cancer surgery, reconstructive surgery and palliative care. It pays to compare policies based on the services and treatments you actually need. Our health insurance comparison tool lets you do just that.

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Our health insurance comparison tool lets you compare policies based on the services and treatments you actually need.

Choosing Silver Plus or Gold

Be cautious when considering a Silver Plus policy, though - it's not always a better option, Uta says. 

"With some expensive services like hip replacements, choose the cheapest Gold cover as most Silver Plus policies will actually cost you more than the cheapest Gold policy. Those Silver Plus policies are actually just a marketing trick dreamed up by the health funds."

Here's how to decide whether Gold, Silver, Bronze or Basic cover is right for you

How much you can save by taking an excess

If you take out a larger excess on your hospital insurance, you can reduce how much you pay in premiums. In short, it'll reduce how much money you pay month to month for insurance; you'll just have to pay the excess if you go to hospital as a private patient. 

But taking a larger excess isn't for everyone, so consider whether it's suitable for your circumstances before you go ahead. If you're likely to need to go to hospital in the next year (eg, you're planning to get pregnant or think you'll need surgery), it's best to stick with a lower excess.

Make sure you have the money available to pay the excess if you unexpectedly have to go to hospital

Uta Mihm, CHOICE health insurance expert

"If you do opt for a larger excess, over two years you'll usually save so much that even if you had to go to hospital, you'll come out on top," says Uta.

"If you haven't got a chronic health condition, aren't pregnant or have surgery coming up, it's usually a better option to take an excess in the long run."

As with any financial decision, it's wise to proceed with caution and consider all possibilities. 

"Make sure you have the money available to pay the excess if you unexpectedly have to go to hospital. Remember that there can also be additional out-of-pocket costs depending on what your surgeon charges," says Uta.  

How much you can save with the big funds if you take an excess

As your excess goes up, your premium comes down, so it's worth looking at how much you can save by taking out a larger excess. Here's what you could save if you change from a $0 excess to a $750 excess with four of the big funds. 

How much you can save with a $750 excess
  Bupa HBF HCF Medibank
$0 excess $3145 $3151 $3132 $3118
$750 excess $2422 $2488 $2532 $2410
Saving $723 $663 $600 $708

*Based on a NSW resident who is a single person taking out a Gold policy. Prices are per year with no rebate.