Need to know
- Premiums increased in April, but you can compare and switch at any time to make sure you're getting the best cover and value
- Insurance for conditions like cataracts and knee or hip replacements are usually only covered by the most expensive top-tier policies
- Use our health insurance comparison tool to ensure you're getting the best value cover
As you get older, your health needs can change so it's vital to check you've got the right policy to cover them.
Sadly, you're more likely to need certain types of treatments and surgeries, and policies that cover these (cataracts or knee replacements, for example) are usually only covered by the top-tier policies such as those in the Gold level.
Health insurance premiums went up on 1 April, but you can compare health insurance at any time and shop around for a better policy if you need to.
Here are our tips to help you check that you have the cover you need, and possibly even lock in a cheaper premium for the next 12 months.
The four tiers of health insurance
Health insurance policies are categorised into four tiers:
- Basic – very little if any cover in a private hospital
- Bronze – low cover
- Silver – medium cover
- Gold – full or top cover.
In between these main tiers there are also Silver Plus, Bronze Plus and Basic Plus policies that cover at least one service more than the normal Silver, Bronze or Basic policies. For example a Silver Plus policy could include cover for pregnancy or cataract surgery (services usually only covered under Gold policies).
Do you have the right level of cover?
It's a sad fact of life but as we age, we're more likely to need certain types of treatments and surgeries.
For instance, about 65% of hip and knee replacements carried out in Australia are for people aged over 65. Older people are also more likely to end up in hospital, with over 65s accounting for more than 40% of day and overnight hospital admissions (despite the fact this age group accounts for only 15% of the population).
|To be assured
of cover for:
|Heart surgery||Silver or Gold|
When reviewing your current policy or comparing quotes, here are some things you should consider:
- You might find cover for these treatments in lower level tiers, but it's not guaranteed. If you do choose a cheaper policy such as Silver Plus, keep a close eye on the policy to ensure it retains the cover you need.
- If you're upgrading your cover, a 12-month waiting period applies for conditions you weren't covered for on your old policy. So if you require surgery, make sure it's scheduled for after you've served the waiting period.
Your policy includes pregnancy but you're done having kids – should you downgrade?
Even though you're at the stage of your life when you're done having kids, whether you should downgrade to a policy that doesn't include cover for pregnancy and fertility is not as simple a decision as it seems.
Pregnancy and IVF are covered by the top-tier Gold and some Silver Plus policies – but these tiers are also suited for people over 65 who want to be covered for surgery typically needed later in life, such as cataract eye surgery, or hip or knee replacements.
A few health funds offer Silver Plus policies without pregnancy, but before taking one out, make sure:
- it's actually cheaper than the cheapest Gold policies as we found a number of rip-off Silver Plus policies that are very expensive
- there aren't other restrictions on things you do need – for example, many Silver Plus policies don't cover hip and knee replacements or rehabilitation in private hospital.
Should you take advantage of a higher excess to reduce your premiums?
Until the health insurance reforms last year, the highest excess you could opt for was $500. But now you can choose to pay a higher excess of up to $750 per person and $1500 per couple/family to reduce your premiums.
An excess is an amount of money you pay out of your pocket towards a hospital visit. You pay an excess once per hospital visit, and it's usually capped at once (single) or twice (couple and family) per year.
But if you think you'll need surgery within the next two years, choose a policy that has a lower or no excess – you might pay a bit more for the premiums, but you won't be hit with high out-of-pocket costs if you do have to stay in hospital.
CHOICE tip: If you're switching from paying a higher excess to paying a low or no excess, keep in mind you'll have to serve a 12-month waiting period (you'll still be covered during the waiting period but you'll have to pay the higher excess).
Health funds that waive the excess for day surgery
If you think you'll need day surgery, such as cataract eye surgery, look for a policy that doesn't charge an excess for same-day patients.
These health funds have these types of policies:
- Health Care Insurance
- RT Health.
Should you drop health insurance altogether?
While public hospitals in Australia provide world-class health care if you have a serious or life-threatening illness, they can have long waiting times for elective surgeries such as cataract eye surgery or hip and knee replacements. So if you already have health insurance and can afford it, we don't recommend dropping it.
Consider these factors:
- Increasing value for money: Australians aged 60 to 79 use their hospital insurance more than any other age group.
- Higher rebates: When you hit 65, you're entitled to a higher rebate – that's the amount the government pays that helps reduce your premiums. For singles earning up to $90,000 and couples/families earning up to $180,000, you'll go from a 24.6% rebate to a 28.7% rebate. As of 1 April 2021, this increased to 32.8% at 75.
- Partners and families benefit: When one member of a family or a couple is 65, the government rebate applies to the whole family or couples policy.
You could, however, consider dropping your extras cover and funding those services (dental, optical, physio etc.) yourself. According to our calculations, the average annual extras premium for a single person in Australia is about $630, and the average benefit (cash you will receive back from your provider) is only $435.
If you have difficulty budgeting, and would rather pay an insurer monthly, rather than forking out hundreds of dollars in one hit for a large dentist bill, extras cover may be useful. But just be aware you could be paying more than you'll ever get back, and we suggest you compare quotes from providers on standalone hospital and extras cover rather than a combined hospital and extras policy.
Five steps to better, cheaper health insurance
Our health insurance experts have put together a handy five-step action plan to help you through the process of reviewing, comparing and switching your health insurance policy.
Just a few minutes could potentially save you hundreds of dollars per year: one of our CHOICE editors saved herself over $1800 annually just by reviewing and switching cover for her young family.
Follow these five easy steps below.