Key Takeaways
- You don’t have to re-serve waiting periods when you compare and switch to a similar or lower health insurance policy.
- Too many Australians are stuck on old, closed policies that are no longer good value for money.
- Comparing your cover helps stimulate competition and holds health funds more accountable.
Comparing health insurance is easier than you think
For many people, comparing health insurance or switching to a new fund feels like an absolute pain – especially if you’ve been with the same insurer for years and haven’t had any issues. But what many people fail to realise is that the private health system is actually set up to make switching easy and hassle-free.
Around 15 million Australians currently hold private health insurance, and a big chunk of those have stayed on the same policy for a decade or more. While that loyalty might seem reassuring, it can come at a cost: older policies are frequently closed out to new members because they include outdated benefits – but still kick in annual premium increases.
At a time when cost-of-living pressures are biting and health needs are changing, it’s worth asking: is your health fund still serving you well?
The power of portability
Possibly the most consumer-friendly feature of the Australian health insurance system is the rule of portability. It’s part of the Private Health Insurance Act 2007 and guarantees that when you switch to a new policy of equal or lower cover, you don’t have to re-serve your hospital or extras waiting periods.
Let’s say you’ve already served the waiting periods for major dental and joint replacements on your old policy. When you move to a similar or lower-tier policy with another fund, those benefits carry over – so if you need treatment, you’re covered right away.
Simply put, it means there are no penalties for moving to a new health fund when you find better value somewhere else.
Why so many Australians stay on outdated cover
A large number of people are still paying for health insurance policies that no longer give them good value. These are policies that are no longer open to new customers but stay active for existing members. Closed products can be problematic for a number of reasons:
- You’re still stung with annual premium hikes, usually every April.
- The rebates and benefits don’t increase to match – or might even decline.
- Extras limits stay frozen at old rates despite rising healthcare costs.
- They weren’t designed with your current health needs in mind.
In other words, you’re paying more each year but getting less and less in return.
New products are released regularly
Most health funds release new products every two to three years to make sure they reflect their consumers’ current needs, new treatments and changing industry trends. These products usually have:
- Updated combinations of clinical categories.
- Better alignment with inflation.
- Refreshed extras benefits and limits.
- Options to suit different life stages (e.g. families, singles, retirees).
The bad news is that most funds don’t actively notify their members about these new policies. And unless you initiate a switch, you could stay stuck on an outdated plan indefinitely. This is why comparing your cover is so important – and why doing it with the help of an expert can save you time, money and headaches.
You might be paying too much for too little
As health insurance advisors, we hear from everyday Australians who feel like they’re paying too much in premiums and getting very little back. This is especially true among people on legacy products with frozen benefits.
Take extras cover as an example. You might be on a plan that pays out $300 per year for physiotherapy, but you’re paying premiums that have gone up by 4% or more every year. Meanwhile, new products come with higher limits or combined family caps for similar or even cheaper premiums.
If you’re not sure whether your policy still stacks up, it’s time to do a line-by-line comparison.
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”
Don't let the ‘devil you know’ hold you back
It’s completely normal to feel hesitant about switching. Many Australians, particularly seniors, adopt the mindset of “the devil you know is better than the devil you don’t”.
But private health insurance isn’t like life insurance or income protection – you won’t be penalised for having pre-existing conditions. In fact, private health insurance in Australia is governed by community rating, which means everyone pays the same price for the same policy regardless of their health status.
And again, thanks to portability, your waiting periods will be preserved when switching to an equivalent or lower policy. So ask yourself: is it really loyalty keeping you where you are, or just habit?
Your policy might not match your needs anymore
Life changes. Your health needs change. So why should your health insurance stay the same?
Lots of people sign up for cover when they’re in their 20s or 30s – usually when starting a family or trying to avoid the Lifetime Health Cover loading. But now, they might need:
- Joint replacement cover.
- Cardiac care.
- Rehab or mental health services.
- More generous extras for dental or optical.
If your policy doesn’t cover what you actually need right now, then you’re likely wasting money on benefits you won’t use – and missing out on those you would.
Health insurance comparison benefits everyone
Switching health funds does more than just benefit you personally – it helps keep the entire industry accountable. When you compare and switch your cover:
- You encourage health funds to release more competitive, better-value products.
- You signal to insurers that members care about transparency and benefits.
- You feed into more fair pricing and product development across the board.
Insurers track member retention as a major business metric. When you apply to transfer, most funds will contact you in an effort to keep your business. And this might be the only time they’ve offered you a better deal.
But wouldn’t it be better if they offered you a great deal before you were thinking about leaving?
How to compare without the confusion
We get it – comparing policies can be confusing. There are dozens of insurers and hundreds of policy combinations out there. That’s where a trusted expert can help. At Fair Health Care Alliance, our advisers take the time to:
- Review your current policy line by line.
- Spot any gaps in your cover.
- Recommend health fund options that would be a much better fit for your needs and budget.
And since we only work with a cooperative of health funds we’ve vetted for fair value and strong benefits, you can trust there will be no junk policies and no pressure. Ready to get started? We can help you compare health insurance policies today, completely hassle-free.
FAQ's
No. Thanks to portability rules, you don’t need to re-serve hospital or extras waiting periods when switching to an equal or lower level of cover.
Health costs rise every year, but outdated policies don’t automatically update their benefits. That’s why it’s important to review your cover every year.
Yes. Community rating laws mean you can’t be charged more or denied cover based on pre-existing conditions.
At least once every one to two years or any time your health needs change. You will likely find newer policies offering better value for money.
Absolutely! Our team at Fair Health Care Alliance can help you compare your options and find a plan that suits you perfectly.
