Choosing Health Insurance

Learn some important tips for choosing your health insurance policy right here with Savvy.

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, updated on July 10th, 2023       

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Health Insurance Banner - Man with glasses looking at his laptop and choosing a health insurance policy

With more than 35 health insurance funds in Australia and hundreds of private health policies to consider, choosing health insurance can seem a little confusing. If you’re in the market for a competitively-priced policy which offers the coverage you’re looking for, it's important to take the time to consider your options carefully. In Savvy's helpful guide, you can find out more about some of the most effective ways to compare and choose between health insurance policies today.

How do I choose which health insurance policy is the best one for me?

There are many areas to consider when choosing a private health insurance plan. These include: 

Types of health insurance 

There are three basic types of health insurance, which are: 

  • Hospital cover – which can assist with costs when you’re treated in a hospital as an inpatient 
  • Extras cover – which can help you pay for healthcare services you receive in the community which aren’t covered by Medicare, such as dental and physio
  • Ambulance cover – which can help with the cost of ambulance transport, both on land and by air 

Ambulance cover is often bundled either with hospital or extras cover, although it can be purchased as a standalone policy from insurers or state-based ambulance services. However, residents of Queensland and Tasmania may not require ambulance cover, as the governments in these two states offer a level of free coverage to their residents. 

Most health insurance policies come in versions suitable for singles, couples, single parents and families. You can choose which sort of policy is most appropriate for your family circumstances. 

Level of cover 

Your next choice concerns the level of cover you need and can afford.  

  • Hospital cover – comes in four levels or tiers: basic, bronze, silver and gold. The health cover offered by these tiers is regulated by the Australian Government, meaning all same-tier policies must offer cover for the same clinical conditions as a minimum. The cheapest cover and most minimal coverage is offered by a basic policy, with a gold policy the most expensive but also the most comprehensive. If a policy offers more than the required minimum coverage for that tier, it’s often referred to as a ‘plus’ policy. For example, a silver policy doesn’t have to cover pregnancy and childbirth by law. However, if a health provider offers this cover with a silver policy, they may call it a ‘silver plus’ policy to denote the fact it offers more than the usual coverage at a silver level. 
  • Extras cover – also comes in different levels, ranging from cheaper policies up to more expensive ones, the latter of which will typically offer the most comprehensive benefits. Extras policies aren’t regulated in the cover they have to provide in the same way that hospital policies are. The difference between them is in the areas of healthcare they cover and how much you’ll receive back in benefits. For example, a basic policy may allow you to claim back 50% of the treatment costs, whereas a more expensive policy may allow you to claim up to 85% of the cost.  

Savvy can help you choose which health insurance policy may best suit your needs from a panel of leading insurers by providing a range of quotes for comparison. Get started choosing the right health insurance here through Savvy today. 

What other factors should I compare when choosing health insurance?

Once you’ve decided on the type of health insurance you’re after, and the level of cover you wish to have, it’s time to compare policies in finer detail. Some of the other points you should look at when comparing private health plans include: 

Cost 

The cost of your health insurance will depend on which type of policy you choose, the level of cover you select and which health cover insurer you go with. However, it’s important to avoid sacrificing necessary coverage in favour of a cheaper premium wherever possible. The ultimate cost of your premiums will also depend on such factors as: 

  • If you’re eligible for an age-based discount (if you’re under 31 years old) 
  • If you’re over 31, whether you have to pay a Lifetime Health Cover loading because you haven’t previously had health cover 
  • If you're eligible for the Australian Government's health insurance rebate 

Inclusions and exclusions 

Take a close look at what’s included in the policy you’re considering and make sure you’re aware of the exclusions that may apply as well. For example, there may be exclusions for certain conditions or terms which state no cover is provided for particular surgeries. 

Waiting periods 

For hospital cover, initial waiting periods are set by the government. These include: 

  • 12 months for pre-existing conditions 
  • 12 months for pregnancy and birth 
  • two months for psychiatric treatment, rehabilitation or palliative care  
  • two months in all other circumstances 

However, for extras cover, it's up to the health fund to determine waiting periods. Some health funds may offer special deals in which waiting periods for certain treatments covered under an extras policy are waived to attract new customers. 

Excess amount 

The excess you’ll have to pay on a hospital cover policy can range from zero up to $750. The higher the excess you pay, the less your policy is likely to cost. This is the amount you’ll have to contribute if you are admitted to a hospital for treatment as a private patient. This excess is often waived for children requiring hospital treatment. Excesses don’t apply to extras policies. 

Co-payments 

Some health funds may also require you to make a co-payment, which is a contribution towards the cost of your hospital stay. They may range from zero up to $100 a day, with this payment also potentially affecting the cost of your policy in the same way your excess can do so.  

Health and wellness benefits 

With extras cover, many health funds also offer a range of health and wellness benefits which may be worth comparing when you choose your policy. These may include: 

  • Free (approved) gym membership 
  • Access to approved subsidised wellness programs to help you lose weight, manage diabetes or quit smoking 
  • Access to helplines or telehealth advisory services where you can speak to a qualified nurse about minor health concerns 
  • Benefits programs including free movie tickets, shopping deals or gift cards for new fund members 
  • No-cost basic dental and other services with allied healthcare professionals who have a fee/benefit agreement with a particular health fund 

Frequently asked questions about choosing private health insurance

Is there a cooling-off period with health insurance if I change my mind?

Yes – health funds offer a 30-day cooling-off period, during which time you can cancel your policy and get your money back. Of course, this assumes you haven’t made a claim on the policy within this window.  

Will there still be out-of-pocket expenses if I choose to get private health insurance?

There may still be out-of-pocket expenses even if you have private health insurance. As mentioned, if you’re admitted to hospital, you may have to pay an excess and possibly a co-payment for your hospital stay. Additionally, with extras cover, there are benefit limits, and you may only receive back between 50% and 85% of the cost of many treatments.  

What happens if I don’t have private health insurance?

If you don’t have private health insurance, you’ll have to pay the full cost of your dental, physio etc. healthcare treatment. In the case of a trip to hospital by ambulance (in those states where ambulance cover is not free) this could end up costing you thousands of dollars. As an Australian citizen, you also have access to free public hospital treatment under Medicare. However, there are often long waiting lists for public hospital care, and you may not have the choices you'd prefer about who treats you and where etc.

Can I buy all types of health insurance through an online broker?

Yes, you can buy all types of health insurance through an online broker, ranging from singles, couples and family policies right through to corporate health insurance. You can get quotes for all types of health insurance here through Savvy. 

What is self-funded health insurance?

Self-funded health insurance is when a person or family pays for their own medical expenses instead of paying a monthly premium to a health insurance company. Often money is set aside each month in a high-interest savings account to pay for all healthcare costs that are incurred. 

Is it cheaper to choose a couples policy rather than two singles policies?

No, you will probably pay the same for a couples policy covering two adults as you would for two singles health insurance policies. Therefore, if you're choosing between a singles vs a couples policy, factors such as compatibility and whether you both want the same level of health cover are more important considerations. 

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Disclaimer:

Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of health insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a health insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.

Savvy’s comparison service is provided by Compare Club. Compare Club compares selected products from a panel of trusted insurers and does not compare all products in the market.

Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.