How to compare health insurance to get the most value

Choosing the best policy isn't just about price

02 January 2024 6 minute read

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Comparing your private health insurance options can be an overwhelming experience but it's important to remember it's not all about price when choosing the policy that is best suited for you.

While you should consider how much you're willing to spend on the right cover, there are other factors to keep in mind when you're looking around. For starters; private health insurance is made up of two parts - 'Hospital cover' and 'Extras cover' - and you're able to buy them separately, or as combined cover.

Throughout this article, we’ll explore what to look for when comparing Hospital and Extras cover options, as well as a few considerations for singles, couples and families.

Choosing the right hospital cover: Bronze, Silver, Gold, or Basic?
What to look for when comparing Extras cover
What to look for when comparing singles cover
What to look for when comparing couples cover
What to look for when comparing family cover
What to consider when comparing health insurance
How to compare health insurance for seniors

Choosing the right hospital cover: Bronze, Silver, Gold, or Basic?

All private health insurers are required by the Australian Government to categorise their Hospital cover products into Gold, Silver, Bronze and Basic tiers that reflect the level of cover they provide. The way treatments are defined is the same across the board too, so all health funds speak the same language.

This means it’s easier than ever to review and compare your options. But, it's important to remember it's not all about price – the cheapest policy may not be the right one for your circumstances.

How to choose the right level of hospital cover for your needs

Before you start comparing any Hospital products, consider your personal circumstances and create a checklist of essential hospital services. Once you’ve narrowed down the services that are important to you, you can start finding options that match.

If you have an existing medical condition, you'll still be able to take out Hospital cover, but you may need to wait longer to have any treatment related to the existing medical condition covered. Be sure to take note of waiting periods and become familiar with pre-existing conditions so you don't end up disappointed with your cover selection later on.

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What to look for when comparing Extras cover

As you did with your Hospital cover comparison, when you start to compare Extras cover options, shop around and consider which services you may want cover for. Extras cover can include things like a check-up at your dentist, a new pair of glasses or treatment at your physio, and can extend to a range of other services like acupuncture and dietary advice, depending on your level of cover.

Once you have checked that the services you want are included in the cover you're looking at, confirm if any waiting periods apply and take note of the annual limits.

Your annual limit is the total amount you'll be able to get back from your claims on that particular service over the year.

Different limits may apply depending on your level of Extras cover.

Tips for comparing health insurance Extras cover

As you compare Extras covers, you'll probably notice the ‘percentage back’ varies from cover to cover. This percentage back refers to the amount from the total cost of your service you'll get back from your health insurer, up to an annual limit. For example, if the cover you're looking at gives you 60% back on physio, your $100 visit would only leave you $40 out of pocket, until you reach your limit for the year. Once you reach this limit, you won't be able to claim anything more for that service until your benefits are reset for the new year.

What to look for when comparing singles cover

Whether you’re young and fit, health conscious, looking to save at tax time or just want peace of mind, there are a range of different health cover options to suit your needs. Here are a few things you should keep in mind when comparing singles cover:

What type of cover will suit your lifestyle? Create a list of what you’d like to be covered for, and then narrow down whether you’re looking for Hospital cover, Extras cover or a combined cover option.
Does the insurer offer discounts for under 30s? At nib, if you’re aged between 18-29, you can get up to 10% off your Hospital cover premiums¹.
Can you avoid the Lifetime Health Cover loading? If you don’t have Hospital cover before 1 July after your 31st birthday, you’ll pay a 2% Lifetime Health Cover loading (LHC) on top of the normal premiums for each year you don’t have Hospital cover, up to a maximum of 70%. The loading applies for 10 years of continuous Hospital cover. So, if you wait until you’re 40, you’ll pay 20% more than someone on the same cover who joined when they were 31.
Could you save at tax time? Having private Hospital health cover could mean you save on tax if you have a taxable income of over $93,000². Find out more about the Medicare Levy Surcharge.

What to look for when comparing couples cover

Whether you’re thinking about starting a family, after comprehensive protection or simply looking for peace of mind for you and your partner, a couples cover option could be the right fit.

Here are a few things you should consider when comparing couples cover:

What cover will suit your shared needs? Are you looking for a basic Hospital cover
or do you both want to be covered for more complex procedures like heart and back surgery? Do you want Extras cover so you can claim on things like dental, optical and physio? Have a discussion with your partner about what you want to be covered for.
Are you planning on starting a family? If you’re planning on having a baby, make
sure you’re shopping around for the right level of health cover. Pregnancy isn’t covered on every policy, so look for a cover option that includes pregnancy and birth-related services. With nib, a 12-month waiting period will apply if you are a new member or have just upgraded your level of cover.
Could you save at tax time? Having private Hospital health cover could mean you and your partner save on tax if you have a taxable income of over $186,000 as a couple². Find out more about the Medicare Levy Surcharge.

What to look for when comparing family cover

Whether you’re a single or two parent family, have little ones, all-grown-up ones or more on the way, here are a few things to consider when looking for family health cover options.

What are your family’s shared health needs? Create a list of what you and your family
would like to be covered for, and then narrow down whether you’re looking for Hospital cover, Extras cover or a combined cover option. Think about what’s potentially on the horizon for you and your children, from braces to tonsillectomies and physio appointments after weekend sport.
Are you planning on expanding your family? If you’re planning on having another baby,
make sure you’re shopping around for the right level of health cover. Pregnancy isn’t covered on every policy, so look for a cover option that includes pregnancy and birth-related services. With nib, a 12-month waiting period will apply if you are a new member or have just upgraded your level of cover.
Could you save at tax time? Having private Hospital health cover could mean you
save on tax if your family has a taxable income of over $186,000 ². Find out more about the Medicare Levy Surcharge.

What to consider when comparing health insurance

Understanding waiting periods

If you're considering purchasing health insurance for the first time or upgrading to a more comprehensive plan, be aware that a waiting period may apply before you can start claiming benefits. However, if you're transitioning to a plan with equivalent or lower coverage, additional waiting periods typically won't apply.

Estimating potential out-of-pocket expenses

Out-of-pocket expenses refer to the costs not covered by Medicare or your private health insurance. These costs can vary based on several factors, including:

The fees charged by your doctor or hospital
The location of your treatment (e.g., in-hospital or out-of-hospital)
Whether Medicare covers the treatment
The inclusions, exclusions, and restrictions of your insurance plan
Any applicable excess charges

Always consult with your doctor, hospital, and health insurance provider prior to undergoing treatment to gain a clear understanding of potential out-of-pocket costs.

Could you save money on your health insurance with rewards and discounts?

Are you eligible for any rewards or discounts with your health insurance policy? It's worth investigating as these can provide additional value and make your policy more cost-effective.

How to compare health insurance for seniors

When it comes to comparing health insurance for seniors, there are several key factors to consider to ensure your health cover evolves with you changing health needs. Start by reviewing your current cover. You might find you're paying for things you no longer need, like pregnancy, especially if your nest is already full. On the other hand, as we collect more candles on our birthday cakes, we might face a higher risk of certain health issues like heart disease, cancer, and eye conditions, so you may wish to increase your level of hospital cover or increase your Extras limits. Remember - if you're upgrading to a more comprehensive plan, a waiting period may apply before you can start claiming benefits. Lastly, explore any available rewards or discounts. Many health insurance providers offer special benefits for seniors, which can make your policy more cost-effective. For a more detailed guide on health insurance for seniors, visit our Over 50s Guide to Health Insurance.

Get comparing!

No one likes paying for things they don't use so you'll be happier if you choose the best cover for you, rather than just picking the cheapest one or the first one you see. Make sure you keep comparing as your health needs (and those of your family) change.

At nib, we encourage you to talk to our expert team about selecting a policy that best suits your needs and budget. If you're not sure where to start, contact us – we’re here to help. Alternatively, you can get a quote online in just a few minutes.

The information shared in this article is general and not meant to guide specific financial choices. Always consult with a professional who understands your personal situation before making any financial decisions.

¹ Discount calculated at 2% for each year an eligible member is aged under 30, to a maximum of 10% for 18 to 25-year-olds. Not available to dependents on the Policy. If you have a partner on the Policy, the total discount will be an average of your individual age-based discount (ABD). Discount applies until age 41, and reduces by 2% per year until removed. Visit the website for more information.

² If your income is over $93k for singles ($186k for couples/families) and you take out and maintain Hospital cover for the full financial year, you could avoid paying an extra 1% to 1.5% in tax via the Medicare Levy Surcharge (MLS). Visit the Australian Tax Office website for specific rules for calculating income for MLS purposes.