Key Takeaways
- Switching health funds could save you hundreds – if not thousands – every year.
- Your current fund might not have the best deal for your needs.
- Lifestyle changes may mean your cover is no longer a good fit.
Introduction & Backstory
When Michelle opened her latest health insurance bill, she knew something wasn’t right. The figure that she was being asked to pay was way higher than she expected.
Michelle had been with her fund, Bupa, for several years. Her policy included Gold-level hospital cover and she hadn’t questioned it until her monthly payments kept creeping up year after year.
A lifestyle change meant Michelle’s cover was no longer the right fit
Michelle and her partner were done having kids and they were barely using the cover, so she wondered if by downgrading she could save a bit.
But when Michelle asked her fund about switching to a lower level of cover, she was told the only alternative was a Silver Plus policy that, at best, gave her a modest price reduction. She was told a downgrade to Bronze would leave her exposed and uncovered for essential services.
But Michelle wasn’t convinced. It didn’t make sense to be paying for things she didn’t need anymore, especially since she wasn’t planning on having any more babies and hadn’t used any of the major services they’d told her she would miss out on.
That’s when she decided to get a second opinion – and it paid off.
The savings: $1,584 a year
A thorough policy review with Fair Health Care Alliance revealed that Michelle could move to a Bronze hospital cover paired with a mid-tier extras policy that still covered her current needs – including dental, optical and physio – for just $281 a month. That’s a $132/month reduction, or $1,584 saved annually.
Even better, Michelle’s existing dentist happened to be a preferred provider for her new health fund, meaning she could continue getting the same services with gap-free benefits.
Michelle’s experience should be a cautionary tale for thousands of Aussies who are currently stuck on the wrong level of cover.
Life changes, and so should your policy
Michelle’s story isn’t unique. Far too many Australians find themselves paying for cover they no longer need – or never did in the first place – simply because their circumstances have changed and they haven’t compared other policies.
Here are some major life changes where reviewing your cover could gift you some serious savings:
- Kids are off your policy: Once your children take out their own insurance, you might be able to move from a family plan to singles or couples cover, or drop services like orthodontics, for example.
- You’ve completed a major treatment: Had your wisdom teeth out, successfully rehabilitated after a specific surgery, or no longer require fertility treatment? You might not need to keep paying for a higher level of cover that includes these expensive services.
- You’re not using your extras: Extras cover is one of the most misunderstood parts of health insurance. If you’re not getting regular value from your extras, or you’re paying for services you’ll never use (like acupuncture or podiatry), it might be time for a change.
- You’ve changed providers or locations: Most people stay on the same fund out of habit. But moving to a fund that has preferred providers in your area can drastically reduce your out-of-pocket costs.
Portability
Don’t re-serve waiting periods when you switch to a new health fund or policy
“John was immediately covered for a hip replacement in private hospital because he had already served his waiting periods for joint replacements on his old policy”
Why staying loyal could be costing you
All the big insurers have internal sales teams that will try to convince you about limited downgrade options or suggest add-ons that aren’t strictly necessary. While this might suit some people, it doesn’t always result in the best value. And that’s exactly what happened to Michelle.
She trusted them when they said Silver Plus was the lowest she could go. But when someone outside the company – an expert from Fair Health Care Alliance – looked at it objectively, they found a Bronze option that actually covered everything she needed.
In Michelle’s case, switching funds altogether was the only way to jump to a more appropriate tier – one that included her essential hospital services without all the extras she no longer needed.
And that’s where comparison and expert advice really matter. Your existing provider might only sell products within a limited range, and their definition of ‘suitable’ probably won’t line up with your budget or actual usage.
Bronze doesn’t mean basic
It’s a common misconception that Bronze hospital cover is low quality and cheap, or only suitable for the young and healthy.
The reality is that Bronze policies must still meet a government-mandated list of clinical categories – covering services like hernia repairs, tonsil surgery, broken bones and joint reconstructions. And Bronze Plus policies go even further, giving you cover for things like gastrointestinal endoscopy, chemotherapy and even some heart treatments.
What Michelle needed was cover that matched her current life stage – not the one she was in five years ago.
How often should you review your policy?
As a general rule, it’s worth reviewing your health insurance every 12–24 months, especially if your circumstances have changed recently. This could include things like:
- A new baby, or completing your family.
- Finishing major treatment or surgery.
- Changing jobs or income brackets.
- Moving to a new part of the country.
- Getting older and dealing with new health risks.
- Kids coming off your policy.
Even if nothing has changed, the health insurance market itself changes all the time.
Premiums go up every year (on 1 April), policies shift and the definitions of what’s included in each tier can sometimes change too. It’s also worth checking your fund’s payout ratio and history of premium increases.
What Fair Health Care Alliance wants others to know
Michelle’s advice to others is simple: don’t assume your current fund has your best interests in mind.
Do your homework. Or better yet, get someone independent to do it for you. For Michelle, it’s such a relief knowing she’s saved over $1,500 a year – and didn’t have to sacrifice anything she felt was relevant to her family’s needs.
Conclusion
At Fair Health Care Alliance, we believe everyday Australians deserve a fair and transparent process for finding affordable private health insurance. So if you’re just starting out or thinking about a policy switch, we’re here to help you compare, cut through the jargon and find a plan that actually works for you.
