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Health insurance savings: we find three people better policies for less

How CHOICE experts helped Anna save $1797 on health insurance cover.

Last updated: 17 September 2020

Need to know

  • The premium increase on October 1 is an opportunity to review your health insurance and make sure it's good value – and right for you.
  • CHOICE now has a tool that lets you review your health insurance cover in a few simple steps.
  • Our tool looked at the health cover for a single person, a couple and a family – all three were able to save money by switching policies.

Reviewing your health insurance can be one of those things that easily falls in the too-hard basket. Where do you even start? But with most funds increasing health insurance premiums on October 1, it's even more important to make sure you aren't spending too much on over-priced health insurance that does not suit your needs.

CHOICE now has an easy-to-use tool that lets you review your health cover in a few steps. We have put it to the test and reviewed the health cover for a single person, a couple and a family. 

For each policyholder, we:

  • checked their claims history for the last 12 months
  • reviewed their cover level
  • compared their cover against other policies.

Health insurance for couples: are two single policies better than one?

Mike and Stella

Current couple policy: Combined Silver plus hospital policy and top extras with a restricted fund, $500 excess. Cost: $5706.

While Mike and Stella are currently on the same policy, they have very different needs, so they decided to switch to two single policies, tailored to their needs.

Mike has only a few extras claims each year, so his current cover is too expensive for him. However, he uses the dentist from his health fund which means he is covered for 100% of his general dental costs – that's why it makes sense for him to stay with the same fund. He downgraded to a budget extras policy which provides good cover for his needs. 

It didn't cross my mind that we could save so much just by taking out health insurance separately

Mike does not have any current health issues but wants peace of mind, so for his hospital cover, he switched to a cheaper Silver Plus policy from another fund which gives him similar cover. He increased his excess to $750 as he is not likely to need hospital treatment.

New cover for Mike

Switch: Budget extras policy with the same fund, $354.

Switch: Silver Plus hospital policy with a different fund. $750 excess, $1481.

Stella makes good use of her extras policy: she has dental treatments and uses physio and massages regularly, so she decided to keep this cover. 

Her current Silver Plus hospital policy does not cover mental health, which is important to her. Mental health (psychiatric in-hospital cover) is included with Gold policies, so she switched to a Gold policy with a $500 excess.

New cover for Stella

Stayed with current extras policy: $825 per year. 

Switch: Gold hospital policy, $750 excess: $2292 per year.

Mike and Stella

Total cost: $4951 per year.

Saving: $754 per year.

While Mike and Stella were already on a good policy, they had very different needs and their cover was not enough for Stella, but too much for Mike. 

By switching to two single policies they made a saving of $754. Mike says, "It didn't cross my mind that we could save so much just by taking out health insurance separately." 

Health insurance for singles: do I need to review my trusted policy?

Anna

Current cover: Single Gold hospital cover and top extras with a large not-for-profit health fund, $250 excess. Cost: $3674.

Anna has been on her policy for a long time. Her fund has closed her policy to new members, which prompted Anna to review her cover.

She found that she is currently covered for a range of therapies that she doesn't need, such as pregnancy, dialysis and obesity surgery. She is also happy to increase her excess as she has no current health issues.

She received a benefit of only $162 for five chiro sessions from her extras policy over the last 12 months. But she will use her extras policy more next year, therefore she wants to downgrade her cover but not drop it.

It's important for her to stay with a not-for-profit fund. 

New cover for Anna

Switch: Silver Plus hospital policy with a smaller not-for-profit fund, $750 excess: $1481 per year.

Switch: Budget extras policy with a small not-for-profit fund: $395 per year.

Total cost: $1876 per year.

Saving: $1797 per year.

Anna can save $1797 by downgrading her health insurance but still keep all the cover she needs. She says, "I knew my health insurance was bad value but was really surprised by how much I can save."

Health insurance for families: upgrading from Junk to Bronze?

Peter and Lea

Current cover: Couple Basic Plus hospital and basic extras. Cost: $2552.

Peter and Lea took out hospital cover for tax reasons only. Their current policy is a Basic Plus one, also referred to as a junk policy as it is not much use for anything else. However, Peter had a hernia operation last year and had large out-of-pocket costs as he was a private patient in a public hospital using his own doctor. He is thinking about upgrading to a Bronze policy that includes hernia.

Their extras review showed that they did not use any extras services. 

They also want their two small children to be covered. Instead of couples cover, they will take out family cover. Family cover won't cost them extra as children in two-parent families are insured for free.

They have decided to drop their extras cover and, for their hospital cover, they are still deciding between two options: whether to switch to the cheapest hospital policy in their state, at $2085, or to switch to the cheapest Bronze policy in their state at $2544.

Switch: Basic Plus, $500 excess: $2085 per year.

Switch: Bronze, $750 excess: $2427 per year.

Saving: $125 (Bronze) or $467 (Basic Plus) per year.

Peter and Lea can upgrade their hospital cover to Bronze, which gives them a low cover level but includes the cover they currently need and includes their children. It would save them $125. Alternatively, they can stay at the same cover level and save $467. 

Peter says, "I never knew that we could get our kids insured for free and I would not have thought we could upgrade and still save money." 

Note: all names have been changed, premiums are valid until 30 September 2020, and all figures are before any rebates.