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How to pay for health insurance in Australia

How you pay for private health insurance can affect the overall cost of your cover.

A smiling woman paying for health insurance

Key takeaways

  • Generally, the best way to pay for health insurance in Australia is direct debit.
  • Direct debit means you'll never miss a payment, and you'll often score a discount.
  • You can usually save money by paying your premiums a year in advance, though not always.

What's the best way to pay for health insurance?

Direct debit tends to be the best way to pay for your health insurance, because you'll often get a small discount on your premiums. For eample, HBF and nib both offer 4% discounts for paying with direct debit. Lots of smaller funds also offer it, but the bigger ones, HCF, Medibank/ahm, and Bupa, don't. Sometimes it pays to shop small!

Should you pay for health insurance upfront?

It might be worth paying for your health insurance a year in advance, but it could also not be worth doing. It will depend on a few facotrs including:

  • Your health fund: Some small funds offer a discount for paying annually. For example, Doctor's Health has a 2.5% discount for paying annually, while Navy Health, HIF and Ausrtalian Unity all offer 2% off for paying 6-months at a time and 4% off for annual. HBF is the he biggest fund with this offer, giving you a 3.84% discount when you pay annually (which stacks with it's 4% direct debit discount, giving you up to 7.84% off).
  • Premium rises: Health insurance premiums go up on April 1st each year. The average rate rise is what's reported in the news and is normally in the single digits, but your policy could go up much more - we've seen some get up towards 20%. Paying a year ahead means you'll lock in today's premium for a full 12 months, rather than having to pay the new price. If your policy is about to go up in price, this is worth considering.
  • Today's interest rate: While you could save by paying a year ahead, keeping cash in your bank account will also make you money by accruing interest. If you can get a higher interest rate by keeping that money in the bank than you'll save by paying a year in advance, then you might be better holding onto the cash. This tends to be a rare situation, but it does crop up.

Paying insurance weekly vs monthly health insurance

There's no real difference in whether you pay for health insurance weekly or monthly. A lot of brands will advertise weekly premiums on their website because they're cheaper, so don't get caught out! However, the you'll end up paying the same amount, give or take a few cents maybe. Your best bet is to sync it to your own finances - basing it on when you get paid works for most folks.

Ways to pay for private health insurance?

Not all funds support every payment types, but these are the main ones:

  • Direct debit from bank account. When you sign up for a policy, all you have to do is provide your bank account details (account name, account number and BSB) to your health fund. The fund will then automatically withdraw the necessary payment from your account whenever the premium is due.
  • Direct debit from credit card. This works the same as above except that instead of providing your bank account details, you provide your credit card details (name on card, card number, expiry date and CVV). Your health fund will then automatically debit your card whenever payment is due.
  • BPAY online or over the phone. When you need to pay a premium, you can do so via BPAY through your bank's Internet or phone banking service. You'll need to provide your health fund's biller code and quote a reference number.
  • Online from your credit card. Most funds will allow you to pay your premium by logging into your health insurance account online and entering your credit card details into the payment section.
  • In person at a retail centre. You can visit your health fund's nearest retail centre to pay via credit card, cheque or any other method of payment your fund allows.
  • In person at a post office. You can visit your local post office to pay your health insurance premium in the same way you might pay a utility bill.
  • By mailing a cheque or credit card details. Some funds will provide a postal address to which you can send a cheque to cover your premium amount, or to which you can send a credit card payment slip.

What are the pros and cons of each payment option?

There are benefits and drawbacks to each of the health insurance premium payment methods listed above. Check out the table below to work out which of these payment options is the right one for you:

ProsCons
Direct debit from bank account
  • Discounts of up to 4% with some funds.
  • Set and forget.
  • You pay using your own funds rather than running up a debt on your credit card.
  • If you don't have enough cash in the bank you can get hit with an overdraft fee. Boo.
Direct debit from credit card
  • Discounts of up to 4% with some funds.
  • Set and forget.
  • Option to earn points on your credit card transactions.
  • All the normal credit card issues - you'll pay interest on your unpaid debts.
BPAY online or over the phone
  • Easy to do via Internet or phone banking
  • Faster than paying in person
  • You'll need to remember to pay each week, month or year.
Online credit card payment
  • Simple and relatively quick to do
  • Faster than paying in person
  • You'll need to remember to pay each week, month or year.
  • Interest applies to credit card debt.
  • Option to earn points on your credit card transactions.
In person at a retail centre or post office
  • Handy if you don't feel comfortable paying online.
  • Only way to pay in cash.
  • You get to speak to a real person - yay!
  • More time-consuming than many other payment options.
  • You'll need to remember to pay each week, month or year.
  • You need to speak to a real person. Gross.
By mail
  • Handy if you don't feel comfortable paying online
  • Multiple payment methods available
  • Takes longer than online payment.
  • You'll need to pay postage.
  • If using a credit card, you have to send your details by mail.
  • Your friends will make fun of you for being old.

Why compare health insurance with Finder?

  • We don't ask for your phone or email to see prices.

  • With 1 click, you can open your results to nearly every fund in Australia.

  • You pay the same price as going direct – we charge no fees.

Frequently asked questions

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Written by

Insurance expert

Tim Bennett is a Finder insurance & utilities expert. For over 10 years he's reported on news, politics, finance and other topics as a journalist and radio presenter. Tim's roles have included radio news reader and breakfast at the ABC, news producer for SBS and producer for Fairfax Media. Tim regularly appears as a health insurance expert on programs like Sunrise and SBS news, as well as in the Australian, The Daily Telegraph, The Courier Mail and more. See full bio

Tim's expertise
Tim has written 114 Finder guides across topics including:
  • Personal finance
  • Financial comparison
  • Health insurance
  • General insurance
  • Life insurance

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