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Changing your excess: How to reduce the cost of your health insurance premium

More options when it comes to your maximum excess limits

A woman hugging her child wrapped in a towel at the beach. Text reads "Should I increase my excess?"
A woman hugging her child wrapped in a towel at the beach. Text reads "Should I increase my excess?"

At nib, we’re passionate about finding ways to make the price of your health insurance more affordable, which is why we give our Australian Resident Health Insurance members the option to increase their excess limit to $750 for singles and to $1,500 for couples or families. 

So, if you’re with nib, you’ll be able to opt for a higher level of excess in return for a lower premium; however, if you’re with another health fund, this might not apply. 

To help you navigate all things excess, we’ve outlined some of the most frequently asked questions. 

What is a health insurance 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 health cover. 

How does excess work on health insurance?

If you select a $750 excess and you make a hospital claim for $2,500 for accommodation and theatre charges (specialist, anesthetist, pathology, radiology are billed separately), you’ll pay the first $750, and your insurer will pay the remaining $1,750. The excess is paid directly to the hospital upfront before you receive treatment and is only payable if you, or someone on your policy, goes to the hospital – it doesn’t apply to Extras cover.

How often do I have to pay excess?

Excess payments are typically made once per person, per calendar year, although this can vary depending on your cover and your health fund. 

If you're an nib member with a family health insurance policy, excess payments are capped at twice the chosen level of excess.  For example, if you choose a $500 excess the maximum excess payment for families would be $1000 annually. However there is no excess for dependant children under 21 years of age.

Excess payments are capped at $750 per calendar year for nib members on a singles policy, and capped at $1500 for all other nib policy types.

To learn more, refer to your Policy Booklet or Fund Rules, opens in a new tab, or call us, opens in a new tab.

Do you have questions around your family’s policy? We’ve put together a family guide to health insurance.

How does changing my excess reduce my health insurance premium?

If you're looking for ways to reduce your health insurance costs, consider adjusting your excess. By opting for a higher excess, such as moving from $500 to $750, you're effectively transferring some of the risk from your insurer back to you by agreeing to shoulder more of the hospital bill. The result is a lower health insurance premium.  

While a paying higher excess will reduce your premium, a lower excess may mean you’ll pay more for your premiums, but won’t have so much to pay upfront if you’re admitted to hospital.

How much excess should I pay?

While there’s no way of predicting whether you’ll need to go to hospital, there are a few factors that can help you determine the right amount of excess you should pay.

You may want to consider a higher excess if you: 

  • Are young and healthy 

  • Have never been to hospital before 

  • Think it’s unlikely that you’ll need to go to hospital 

  • Can afford the upfront cost of a higher excess 

You might want to consider a lower excess if you: 

  • Have a history of health concerns 

  • Have made multiple hospital claims in the past 

  • Think that you may need to go to hospital in the future 

  • Can’t afford the upfront cost of a higher excess 

How can I check my current excess amount?

You can check your Hospital excess anytime by logging into your nib account online or through the nib App. OVHC members will need to contact us or for more information about the excess on your policy.

How do I select an excess option?

Your excess limit is selected when you purchase a health insurance policy. If you’re an nib member and you’d like to confirm your excess amount, you can do so by logging into member account, opens in a new tab or via the nib App, opens in a new tab.

Can I change my excess at any time?

Yes, you can change your excess at any time by logging into your member account, opens in a new tab or via the nib App, opens in a new tab. However, if you choose a lower excess, it's considered a cover upgrade. This means that you’ll have to re-serve waiting periods, opens in a new tab, and your previous higher excess will still apply during this time. A standard two month waiting period applies for sudden illness and a 12-month waiting period applies for any Pre-Existing Conditions1.

What are other ways I can reduce the cost of my premium?

There are a number of different ways you can reduce the cost of your health insurance premium, from reviewing your cover to ensure you’re not paying for things you don’t need, to taking advantage of nib’s direct debit discount.

For other helpful tips on reducing the cost of your cover, check out our guide to saving money on your health insurance premium.

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1Waiting periods will apply for services not currently covered, services with higher benefits or where waiting periods haven’t been fully served. Where the excess on the new product is lower than the excess on the previous cover, the excess on the previous cover will apply until the unexpired waiting period has been served. Any benefit limits already used with your current fund will apply to your nib Health Insurance policy.