There are plenty of complexities around comparing and taking out private health insurance in Australia. We get it – it can sometimes feel overwhelming. But the good news is there are some key principles – or ‘golden rules’ – that can help you make better decisions and avoid a few common pitfalls.
So, whether you’re a long-time policyholder or exploring your options for the first time, these 10 golden rules will help you get the most out of your cover.
1. Stay on top of your premium payments
Like any bill, you’ll want to make sure your premiums are paid on time. Falling behind on payments could mean your policy ends up lapsing, leaving you without cover when you need it most. Thankfully, most health funds will allow a short grace period – which might be necessary given the current cost of living crisis. But be aware that after two months of non-payment, your policy could be cancelled. If this happens, you’ll be inconvenienced by having to re-serve waiting periods to get your coverage back.
To stay ahead, it’s a good idea to set up automatic payments via direct debit and keep an eye on your bank statements to see that the deductions are correct. If you’re struggling financially, many health funds will have options like payment plans or temporary premium relief, so it’s worth reaching out to your insurer for help if you need it.
2. Get to grips with waiting periods
If you’re thinking about switching health funds or upgrading your policy, you’ll need to understand how waiting periods will impact your cover. The portability rule means that if you switch to a policy with similar benefits, you won’t need to re-serve waiting periods that you’ve already completed.
However, any new or higher-level benefits will come with their own waiting periods, which could range from two months for general treatments to 12 months for pre-existing conditions or pregnancy/obstetrics services. Also, if you let your coverage lapse for an extended period, you might lose continuity and have to re-serve waiting periods altogether.
3. Regularly review your plan
Your health needs and life circumstances will change as the years go by, so you’ll need to review your private health insurance policy annually. Life events like starting a family, transitioning to an empty-nester lifestyle or hitting retirement age could greatly alter your healthcare needs.
Say you want to add pregnancy services or remove them to save on premiums – reviewing your policy will mean you can make a switch and no longer pay for unnecessary extras, while at the same time spotting any opportunities to upgrade your benefits.
4. Be aware of changes to your cover
Health funds will usually raise their premiums every year and potentially adjust their benefits, which can change the value and scope of your cover. You’ll want to read all correspondence from your insurer, including updates on changes to their benefits or the cost of premiums. Even if you’ve paid your premiums in advance, these changes can still apply.
To stay informed, make sure all your contact details – including your email address and mobile number – are current with your insurer. Keep an eye out for annual Standard Information Statements, which will summarise your cover, and read any documentation sent around March when these changes are most commonly announced.
Bottom line? Be proactive so you can anticipate and adapt to changes without being stung down the track.
5. Understand your extras cover
Extras cover is all about footing part of the bill for common services like dental, optical, physio and more, but it comes with its own set of rules and limitations compared to hospital cover. Each policy has annual benefit limits, and knowing about these is essential for planning your future treatments and avoiding out-of-pocket expenses.
You might only be able to claim for a certain amount for dental work or a specific number of physiotherapy sessions within a calendar year, for example. Some funds reset limits at the start of the calendar year, while others use a financial or membership year. Also be aware of any lifetime limits, which will carry over even if you decide to switch to a different provider.

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”
6. Ask the right questions before getting treatment
Before undergoing any treatment, particularly in a private hospital, you’ll want to clarify the exact costs involved with both your healthcare provider and your insurer.
Start by asking your doctor for the Medicare item numbers for the proposed treatment, as these will help your insurer give you the most accurate information about your cover. Also find out whether your doctor participates in your health fund’s gap cover arrangement, as this can minimise – or even eliminate entirely – your out-of-pocket costs.
If other specialists, like anaesthetists, will be involved in your treatment, ask for their fees in advance to get a complete picture of the costs. Transparency and planning can help you avoid being hit with unexpected bills later on.
7. Learn about hospital agreements
Many health funds have agreements with private hospitals that can minimise your out-of-pocket costs. If you choose a non-agreement hospital, bear in mind that you will likely have to pay a higher amount, as your fund might only cover a portion of the fees.
Before booking in any procedures, contact your health fund to ask about whether your preferred hospital is part of their network. If not, then you can make a more informed decision about where to get treatment and lower the financial burden on yourself. Some insurers will also provide written confirmation of benefits, which can give you more peace of mind before the procedure.
8. Communicate any changes in your circumstances
Keeping your health fund updated about any changes in your lifestyle can prevent any potential complications and guarantee your cover stays appropriate. If you move interstate, for example, your premiums and benefits might change due to state-specific healthcare arrangements. Similarly, if you’re travelling overseas for an extended period then you might be able to suspend your policy for a time, which means you can hold onto your cover without paying premiums while you’re away.
Also bear in mind that changes in your family dynamics – such as adding a newborn or a child leaving home – should be communicated as soon as possible so that all your dependents are appropriately covered.
9. Make claims promptly
Submitting your claims in a timely manner is the best way to access your health fund benefits without financial stress. Be aware that most funds have a two-year time limit on claims, so act quickly after getting treatment.
Using your insurer’s online portal or mobile app will streamline the process and mean you don’t have to worry about losing paper receipts. If you’re mailing your claim, keep copies of every piece of documentation for your own records.
10. Know your rights when switching funds
Switching health funds for more affordable health insurance or to get more benefits is something most Australians will do in their lifetime, but how can you make the transition a smooth one? The portability rule protects your continuity of cover, however any upgrades or new benefits will come with their own waiting periods.
It’s also important to verify the terms of your new policy before switching, as some accrued benefits (e.g. orthodontic limits) might not transfer across. At the end of the day, it’s on you to make sure you completely understand the fine print to avoid surprises and make the most of your new policy.
Conclusion
These 10 golden rules should help you avoid the most common pitfalls and maybe even reduce your premiums, so bear them in mind when you are doing anything related to private health insurance.
Fair Health Care Alliance is all about empowering you with knowledge and giving you the best options to compare policies that match your healthcare needs. You can get started today.