How to pay for health insurance in Australia

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:

Frequently asked questions

• Can I pay for health insurance using a credit card?

  Yes, you can pay your health insurance premiums with a credit card. Whether you're with a major fund or a tiny restricted fund, everyone takes credit card. If you set up direct debit via credit card you might also score a discount of up to 4%, depending on your fund. Nice.

• Can I pay for health insurance via direct debit?

  Yep, you can pay for health insurance by direct debit, and you probably should. Not only will you never forget to pay your premiums which could leave you without cover, but you might get a direct debit discount if your health fund offers one. These discounts are more common with the smaller funds, but both HBF and nib offer a 4% direct debit discount too. These typically apply to credit card direct debits too, so you can still earn points if you're a points nerd.

• Can you salary sacrifice your health insurance premiums?

  Salary sacrificing for health insurance is pretty uncommon in Australia. Countries like the USA are more likely to have health insurance ties to your employment. Not to editorialise, but it's a pretty rubbish way to do it - the Australian version is better for a lot of reasons. Anyway, you might be able to get health insurance through your work, but you'll need to speak to your human resources team to check.

• What is rate protection?

  For health insurance, rate protection refers to the process of paying a year in advance to avoid the scheduled increas in premiums. Health insurance premiums go up on April 1st every year, so paying a year in advance in say, February, will lock in the lower rate for that full year. Assuming the rate increase is higher than what you could earn in a savings account (which is typically is) you'll be saving money. Also, some health funds like HBF give you a discount for paying a year in advance, which helps knock a few more dollars of your premium.

Written by

Tim Bennett

Insurance expert

A seasoned journalist with over 10 years of experience in news, politics and finance reporting, Tim has previously held roles at the ABC, SBS and Fairfax Media. Tim’s expert insights have been quoted in The Australian, The Daily Telegraph, The Courier Mail and more. He regularly appears on TV and radio, and has been interviewed on 7 News, Sunrise, SBS News, ABC Local, 3AW and 5AA. Tim is passionate about simplifying complex insurance topics for Australian consumers. He holds a Bachelor of Arts (Politics) from Macquarie University and a Tier 1 General Insurance (General Advice) certification, which meets the requirements of ASIC Regulatory Guide 146 (RG146). If you’re interested in a media interview with Tim, please reach out to our PR team at aupr@finder.com. See full bio

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Tim has written 158 Finder guides across topics including:

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