Key Takeaways
- Comparing health insurance providers online through a broker can result in big savings.
- It might not be wise to go for the cheapest Basic plan – you want to get real value from your health insurance.
- Adjusting your excess and taking advantage of rebates can help keep your insurance costs low.
How to save money on – and still benefit from – private health insurance
An unfortunate fact of life is that health insurance premiums go up every year, leaving millions of Australians looking for ways to keep costs down without sacrificing health cover. But picking the right plan is about more than just finding the cheapest option – you need to spend a bit of time making sure you’re getting actual bang for your buck.
Too many people unknowingly overpay for health insurance or hang on to policies that no longer meet their needs. The good news is that just a few smart changes can end up saving you hundreds – if not thousands – of dollars every single year.
So here are 5 practical strategies to start lowering your health insurance costs while still getting the cover you deserve.
1. Compare online with a broker for the best deal
It’s easy to kick up your feet and simply stick with the same health insurance provider for years on end. Maybe you worry that switching will be too complicated. Or maybe you just don’t think there are any real savings to be had. But shopping around and using an independent health insurance broker is an easy way to find a plan that matches your current needs – at a lower price.
Using a trusted broker or online comparison tool can help you spot cheaper policies that will give you the same – or better – cover than your current plan. Because health insurance prices depend on the provider, and insurers regularly raise their premiums based on competition and market trends, comparing with a broker makes everything simpler.
Here’s what you need to do when shopping around for the best plan:
- Look beyond big-brand names: Smaller, not-for-profit health funds can sometimes deliver better cover at lower prices.
- Check for hidden fees and exclusions: Some policies appear cheaper, but read the fine print and you’ll see sky-high out-of-pocket costs for common services.
- Use a broker to see options from multiple funds: The big-name comparison sites might not be showing you the full range of options available – just the funds they are partnered with.
- Look at waiting periods when switching: If you’re moving to a similar or lower level of cover, you won’t need to re-serve waiting periods.
Bottom line: Comparing health insurance through an independent broker or reliable online comparison tool is the best way to secure a great policy and price.
2. Don’t rely on a bare-bones Basic plan
Some people take out Basic-tier health insurance purely to avoid the Medicare Levy Surcharge (MLS) without considering whether their policy will actually give them any real benefits. Unfortunately, these low-cover plans usually fail to provide meaningful protection if you need hospital treatment.
Cheap hospital plans will most likely cover ambulance services and just a handful of restricted hospital procedures. In reality, this means you’ll still be expected to foot large out-of-pocket costs if you ever need surgery, specialist care or emergency treatment.
Recent analysis found that a Basic policy with a $750 excess costs around $78 per month for a single 30-year-old. Meanwhile, a Basic-plus or Bronze plan – which can include services like gynaecology and hernia surgery – costs only about $91 to $98 per month. The price difference is negligible, but the amount you are covered for is vastly superior.
So, what’s a smarter approach? Instead of purchasing a bare-minimum policy just to avoid the MLS, think about going a step higher to a Bronze – or even Silver – plan that offers genuine value:
- Bronze-plus policies generally cover dental surgery, joint reconstructions and more.
- Silver plans give you the best of both worlds in terms of affordability and comprehensive care.
- Check your state’s ambulance policy. If you live in Queensland or Tasmania, these are already covered by your state government (making ambulance-only cover obsolete).
Bottom line: If you can afford to spend a few extra dollars per month, upgrading from Basic to Bronze or Silver cover can deliver substantial long-term savings by covering useful procedures and minimising your gap fees.
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”
3. Adjust your excess for cheaper premiums
Your excess is the amount you agree to pay when making a claim on your hospital insurance. Upping your excess means you’ll pay less on your monthly premiums. Most health funds offer three common excess options (with some funds having no-excess options):
- $250 excess (higher premiums, lower upfront costs if hospitalised)
- $500 excess (balanced option with moderate premiums)
- $750 excess (lower premiums but higher costs if you have to make a claim)
A policy with a $750 excess can save you hundreds per year compared to having a $250 excess. Since most people only rarely have to be admitted to hospital, choosing a higher excess could make good financial sense.
Still unsure? Here are some scenarios when it might be a good idea to look at upping your excess:
- If you are generally healthy and don’t expect to be making any hospital visits in the near future.
- If you have savings set aside to cover the excess.
- If the difference in cheaper premiums outweighs the potential excess cost.
But remember – if you have a chronic condition or expect to need hospital treatment soon, a lower excess might be more advisable.
Bottom line: Choosing a higher excess can seriously lower your premiums, but make sure it suits your financial situation and healthcare needs.
4. Cut out extras if you’re not using it
Extras insurance – which covers things like dental, physiotherapy, optical and other allied health services – might not be worth the price unless you are using the services quite often. Unfortunately, too many Australians are overpaying for extras cover without actually claiming enough benefits to justify their premiums.
Forking out for extras cover, however, will make sense if:
- You regularly visit the dentist for cleaning, fillings, orthodontics or major dental work.
- You use physiotherapy or chiro services multiple times a year.
- Your policy packs in the benefits to make up for what you pay in premiums.
On the flip side, you’ll want to reduce – or drop entirely – your extras cover if you only visit the dentist once a year and don’t use other services. If your rebates are minimal compared to the premium cost, or if your policy includes services you never use, then it also might be time to wave goodbye to extras.
Let’s say your extras cover costs $800 annually but you only claim $300 worth of benefits over the course of a year. You’re losing money. Switching to a better policy or dropping extras altogether can free up cash for other expenses.
Bottom line: Extras insurance isn’t always necessary. Think about how often you use the services and make a change.
5. Take advantage of rebates and discounts
If you weren’t already aware, there’s a private health insurance rebate to help reduce the amount you pay in premiums. The problem is that lots of Australians aren’t taking advantage of this benefit or aren’t aware of discounts offered by competing insurers. Here are some of the easiest ways to maximise your savings:
- Check your rebate eligibility: For under-65s, if your income is below $97,000 (single) or $194,000 (couple/family), you can claim a rebate of up to 24.288% (as of 1 April 2025).
- Pre-pay your premiums annually: Some insurers will give you a discount for upfront payments. If you pay before 1 April, you’ll also avoid being stung with the next premium hike.
- Use direct debit: Some funds might be able to tempt you with small monthly discounts for automatic payments.
Bottom line: Make sure you’re claiming the full rebate and looking out for discounts to reduce your insurance costs.
To sum up...
Ready to get more bang for your buck with private health insurance. The experts at Fair Health Care Alliance are here to help you compare health insurance plans and find the right fit for your situation – and your budget.
FAQ's
At least once a year, especially before the annual premium hikes in April.
Yes, if you switch to a policy with the same or lower level of cover.
If you regularly use services like dental, physio and optical then it can be worth it – otherwise, you may be better off saving the money.
