Need to know
- Most private health funds have announced they'll be delaying their price increases this year
- If you're able to prepay for 12 months before your fund raises the price, you can lock in your current premium and make some great savings
- CHOICE experts say it's also a good time to review your health insurance to see if you can get a better deal
CHOICE health insurance experts are encouraging Australians to take one simple step to delay any price increase to their health insurance premium until as late as 2024.
Usually, we advise that an excellent way to save money is to prepay your annual premium before 31 March – to 'lock in' your current premium and avoid the price increases that usually come into effect on 1 April each year. Some funds also offer discounts of about three to four percent for prepaying, which adds to the savings.
But this year there's a way you can save more money by delaying the price increase even further, and it could potentially save you hundreds.
Why are premium increases being delayed?
Most private health funds have announced they'll be delaying the premium increase in 2022, in some instances as late as November.
They're doing this because the COVID-19 pandemic has meant many people haven't been able to make full use of their health insurance policies, given that things such as elective surgery were put on hold, and access to specialist services and dental appointments (for instance) was restricted.
'Locking in' your premium
Some funds will also let you lock in your premium for up to 18 months. For example, NIB lets you prepay 13 months, while HCF and HBF offer 18 months.
As HCF is only raising its premium on 1 November, this means that if you're an HCF customer, you can lock in your current premium until 31 March 2024, potentially saving you hundreds.
If your fund isn't increasing the premium on 1 April, don't succumb to any advertising from commercial comparison sites or other health funds that might be pressuring you to prepay now to saveJodie Bird, CHOICE health insurance expert
CHOICE health insurance expert Jodi Bird says, "If your fund isn't increasing the premium on 1 April, then don't succumb to any advertising from commercial comparison sites or other health funds that might be pressuring you to prepay now to save.
"The best thing to do is use this extra time to save up some money so you can prepay when your fund does increase their prices later in the year."
How do I take advantage of this simple money-saving hack?
Here are three basic steps to follow.
1. Check if your fund is delaying its premium price rises this year
We have a comprehensive list below. The funds delaying their increase the longest – until 1 November – are HCF, RT Health and Transport Health.
2. Find out how long you can prepay for if you get a discount for prepaying, and if you can get a discount for paying by direct debit
Contact your fund to get the details.
Funds that let you prepay longer than 12 months: HCF, HBF (18 months) and NIB (13 months). The other two big funds, Medibank and Bupa, allow 12 months only. Some smaller funds may do the same.
Funds that offer discounts for paying in advance and for direct debit: HBF currently offers 4% for direct debit, and 3.85% if you prepay your annual premium, meaning you can take advantage of a combined discount of 7.85%. But HBF isn't delaying its premium increase at this stage. NIB also offers a 4% discount for direct debit.
HCF, Medibank and Bupa don't give a discount for direct debit or prepayment of your premium.
3. Before your premiums rise, make your payment
But don't leave it until the last minute – some funds require prepayment by a certain date. Check with your fund to find out.
But hold on – now's a good time to review your cover
Before you lock yourself into your current fund for 12–18 months, now is also a great time to do a quick health insurance audit and review your current cover to make sure you're not paying for things you don't need. Could you downgrade to a cheaper policy or get a better deal at another insurer?
The same cover with a different insurer can be hundreds of dollars cheaper
The same cover with a different insurer can be hundreds of dollars cheaper. The largest savings are available for Gold policyholders, but even if you have a Silver or Bronze policy, you'll probably be able to find a cheaper deal that will give you at least the same cover. Our experts have found that in some cases you could save up to $935 per year.
Compare health insurance policies and see how your current premium fares against the top policies for your selection.