A guide to saving money on your health insurance cover

A few small changes can make a big difference

02 January 2024 5 minute read

Woman looking at her phone while eating breakfast. Text says "reduce your health insurance costs."

Your health is one of the most valuable assets you’ll have. At nib, we want to help you make the right health choices at the right time. That’s why we offer more than just health insurance. We offer a range of healthy living products, tools and services to help guide and support you to proactively manage your health.

Should something go wrong, having private health insurance is a way to ensure you’ll have the right financial support when you need it most. But, your cover shouldn’t be set and forget.

Keen to find ways to save money on your health insurance premium? A few small changes can make a big difference.

So here are a few ways you can save money on your health cover today.

1. Review your cover to ensure it suits your personal needs and situation

Your hobbies, interests and taste in music can change as you get older, and your health needs are no different. If you want to ensure you’re getting the best value on your private health insurance, it’s important to review your cover regularly.

If your family is complete, now might be a good time to change to a policy that doesn’t include pregnancy cover. Or, if you’ve recently given up marathon running for good, you might not need as high a level of Extras cover for the physio (unless you’ve taken up rugby instead).

As we experience each new stage of life, our health needs can change, so save yourself some cash and make sure you're not paying for cover you don't need. You may also be entitled to rebates if your income has changed. Review your cover quickly and conveniently online in your member account, via the nib App or give us a call.

2. Check your excess

Just like with your car or home insurance, an excess is an amount of money you agree to pay for a hospital stay, before health insurer benefits are payable. Generally speaking, choosing a higher excess means you’ll pay less for your premium, but you’ll pay a higher amount in the event you go to hospital.

nib members can choose an excess limit of $250, $500 or $750 for singles, and $1,000 or $1,500 for couples or families. So, if you’re with nib, you can now opt for a higher level of excess in return for a lower premium.

3. Take advantage of age-based discounts

If you’re under 30, you’re in luck. Eligible nib members aged 18-29¹ automatically receive discounts of up to 10% on their private hospital insurance premiums, called the age-based discount.

These members receive a 2% discount for every year that they’re aged less than 30, up to a maximum of 10% for those aged 18-25. And, the best part is if they remain on an age-based discount policy, they’ll retain that discounted rate until they turn 41, where it will then be gradually phased out at a rate of 2% per year.

Related: Discounts for people under 30

4. Take out cover before your 31st birthday

If you don’t currently have private health insurance, and you’re under the age of 31, then there’s no better time to take out cover. Why? Because if you don’t have private hospital cover by 1 July following your 31st birthday, you might have to pay a Lifetime Health Cover (LHC) in addition to your premium.

The LHC loading is a Government initiative put in place to encourage people to take out private hospital cover earlier on in life. For every year you delay, you’ll be charged a 2% loading on top of your premium when you take out a policy. With the LHC loading lasting for 10 years and at a maximum of 70%, it’s definitely worth avoiding if you can.

Our Lifetime Health Cover article has more information on the topic if you’re preparing to blow out 31 candles.

If you want to get the best value from your private health insurance, review your cover regularly

5. Set up direct debit payments

If you set up automatic direct debit payments from your bank, building society or credit
union cheque or savings account, you might be eligible for a discount of up to 4% on your nib premium². Simply login to Member Services to add or update your direct debit details.

6. Utilise the nib First Choice network

To help keep your out-of-pocket expenses low when visiting a dentist, optometrist or physiotherapist, our nib First Choice network should be your first port of call. It’s our community of specially selected health providers who have agreed to provide nib members with quality healthcare at an affordable price.

You can choose to see the dentist, optical or physiotherapy provider of your choice, but by choosing an nib First Choice provider, it simply means you could pay less. Search the nib First Choice network now to find a provider.

7. Beat the price hike by paying your premium in full

Consider 'locking in' your premium in full before the annual price rise. Locking in, also known as Rate protection, allows you to pay your premiums up to 13 months in advance unless a financial change is made to the policy.

But before you dive in, take a moment to check how this might impact your monthly budget. After all, it does mean parting with a large sum of money all at once. And don't forget to check in with your insurance provider to find out the cut-off date for this option. It's all about making smart choices that work for your wallet and your wellbeing!

8. Leverage your age to save on health insurance

If you're under 31, you're in a sweet spot for saving money on health insurance. In the last few years Australia government extended the age limit for dependents on a family health insurance policy from 24 to 31.

Of course, you'll need to have a chat with your parents about staying on their policy (or hopping back on), but it's a fantastic short-term strategy to keep your health insurance costs down. Just remember to check your parents' policy details, as factors like your income or where you live can influence your eligibility.

9. Suspend your policy before ending it

If you're finding it tough to fit private health insurance into your budget, don't worry, you're not alone and there are options. Before you decide to cancel your cover, why not ask your health fund if you can put it on pause? At nib we offer you the flexibility to suspend your policy, simply give us a call to chat through your options.

Letting go of your health cover might seem like a quick way to save some cash, but keep in mind, it could come with a few hidden costs. You might find yourself paying a bit more at tax time due to the Medicare Levy Surcharge, and if you decide to hop back on the health insurance wagon later, you could face Lifetime Health Cover loading.

And let's not forget the long waiting lists in public hospitals, which have grown since the COVID-19 pandemic. As we all tighten our belts, it's crucial not to leave ourselves exposed to unexpected health costs. If you're worried about the cost of your private health insurance, have a chat with your health insurance provider. They can help you understand your current policy, explore any available support, and even identify potential savings. After all, your health cover should fit your life, not the other way around.

nib has a range of great health covers, meaning our members have options when it comes to protecting their health. We encourage you to take a look around and make sure you find the cover that’s right for you. For more information on cover reviews, check out our article, Everything you need to know about reviewing your cover or call 13 14 63 to speak with one of our health insurance experts.

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.

¹To be eligible, you must be aged between 18 and 29 (inclusive) and not a dependent under the age-based discount policy.

²Discount not available on Ambulance Only cover.