Loyal or lazy? Aussies paying the price for sticking with their health insurer

26 March 2019, Sydney, Australia - The majority of Australian health fund members have only switched health funds once in their lives, according to research from Finder, Australia's most visited comparison site.

The national survey of policy holders revealed more than a quarter (27%) of covered Aussies have stuck with the same health fund their entire adult life.

More than a third (34%) have only switched insurers once.

Kate Browne, personal finance expert at Finder, was shocked by how infrequently Australians changed funds.

"One of the great challenges with health insurance is understanding complex policies, and that alone can be enough to paralyse people.

"But loyalty really doesn't pay off. While shopping around and researching the ins and outs of cover can be complicated, the savings every month could really add up over a year," Browne said.

Finder analysis of Department of Health data¹ shows premiums have risen on average by 42% since 2012.

For example, if you were paying $2,000 for a policy in 2012, that same policy would cost you more than $2,830 in 2019.

Browne said premiums are rising every year and some insurers hike their rates more than others.

"With the 1 April price hike looming and other changes in the form of new tiers, now is a perfect time to review your policy and potentially switch to a health fund offering better value for money.

"Insurers know policy increases and changes give some health fund members itchy feet, so they make changing more attractive by waiving waiting periods and throwing in sign-up bonuses," Browne said.

This year funds will raise their prices anywhere between 1.6% and 5.9% on 1 April.

Browne said Aussies need to remember they're not locked in.

"Switching is easy and in many cases your new provider will do the work for you. A better deal is just a click or a phone call away," she said.

¹http://www.health.gov.au/internet/main/publishing.nsf/Content/privatehealth-average-premium-round

Tips to reduce your health insurance costs

• Corporate policies: Check with your employer to see if it offers corporate health insurance. Corporate sector discounts of up to 12% are often granted by health funds, which are then passed onto employees in the form of cheaper policies.
• Family policies: Many health funds offer incentives for families, such as no hospital admission excess for children, no-gap dental and allowing you to keep your child on your policy until they turn 25 (if they're studying full-time).
• Single parent policies: Health funds have been allowed to provide single parents with a reduced premium compared to the family rate since 2007. If your fund doesn't offer a reduced rate, consider moving to another fund that does.
• Annual and direct debit discounts: Look for a fund that rewards you for prepaying your premiums or having them direct debited out of your account.

Source: Finder survey of 1,162 Australians with private health cover, Feb 2019