How to save on health insurance


6 minutes

17 June 2024

Tips when reviewing your health cover
This article was originally published on but has since been revised with new information.

An umbrella term, 'health insurance' has many components that you can chop and change to suit your needs.

Understanding how each works is the key to finding potential ways to save on:

  1. Hospital insurance
  2. Extras insurance
  3. Ambulance insurance

Hospital insurance

Hospital insurance helps cover your costs for treatment in a private hospital. You can also use it to cover treatment in a public hospital. If you’re confused about why you would use private insurance in a public hospital, you can read all about it here. In this article, we’ll focus on ways to reduce your hospital insurance premiums.

Ways to save

The first thing you can do is review your level of cover. HBF’s highest level of hospital insurance is ‘Gold Hospital Elevate’. It covers you for all procedures and services covered under the Medicare Benefits Schedule.

To save money, you can choose (or switch to) a lower level product.

Lower level products exclude or restrict cover for a small number of more expensive services like maternity, heart treatment or cataracts, making them a bit cheaper.

The challenge is you don’t always know what services you might need in future. For example, switching to a product that excludes maternity may also mean inadvertently dropping cover for heart treatment. So be careful you don’t accidentally drop cover for something you might really need.

Another way to save is to add or increase your excess.

Hospital insurance excess is just like an excess for your car or home insurance—it’s something you pay upfront out of your own pocket when you go to the hospital.

By adding an excess to your Hospital insurance, you’ll bring down the price. If you already have an excess, consider increasing it to lower your premium. 

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What happens if you cancel?

If you don’t have private hospital cover and something goes wrong, you will need to access the public system or potentially pay thousands of dollars to access treatment in the private system. If you try to take out Hospital insurance again later, you will have to re-serve any waiting periods, which includes a 12-month waiting period for pre-existing conditions.

If your income is more than $97,000 (or $194,000 for couples or families), dropping Hospital insurance means you could be hit with the Medicare Levy Surcharge (MLS)—an extra tax the Government imposes on higher income earners who don’t have Hospital insurance.

Also, if you’re over 31 and you drop your Hospital insurance, you may be subject to Lifetime Health Cover loading (LHC) if you decide to take it back out again in future. The LHC loading basically means that if you get Hospital insurance again when you’re older, you will pay more for it than everybody else—2% more for every year over age 30 that you didn’t have cover.

Extras insurance

Extras insurance covers you for treatments outside of the hospital—things like dental, optical and chiro. These are services Medicare generally doesn’t cover, so without extras insurance, you’d pay the full cost out of your own pocket.

Ways to save

Extras insurance works differently to hospital insurance, in that changing your level of cover impacts both the services you’re covered for as well as how much you’ll get back.

Generally, you can save money on extras insurance by choosing a product with:

  1. Lower benefits (the amount of money you get back when you claim);
  2. Lower annual limits (the amount you claim up to over the course of a calendar year);
  3. And/or fewer services.

You can compare different levels of Extras cover here.

You could also get more value for money by increasing your benefits, annual limits and the number of services covered. That’s because most extras services generally involve an out-of-pocket cost. By increasing your level of cover, your insurer will pay more of the service cost, reducing the amount you pay out of your own pocket.

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What happens if you cancel?

To lower your health insurance premium, you could cancel your Extras insurance and just keep Hospital insurance.

The Government has no penalties for not having Extras insurance (so you won’t have to pay the MLS for not having it, or be subject to the LHC if you take it up again later). The down side is you’ll have to pay 100 per cent of the cost for things like optical and physio because Medicare generally doesn’t pay anything towards those services.

You will also have to re-serve wait periods if you choose to take Extras insurance out again in the future (usually anywhere from two to 12 months depending on the service). 

Ambulance insurance

Medicare doesn't cover the cost of emergency transport and other ambulance services.

For example, in the Perth metro area you would pay $1,0721 out of your own pocket for an ambulance in an emergency situation .

Depending on your state or territory of residence, you will need to take out Ambulance cover to help cover the cost of ambulance transport (unless you are a resident of Queensland and Tasmania where Ambulance services are covered through the state’s own subsidised ambulance scheme )2.

With HBF, there are two types of ambulance insurance: Urgent Ambulance and Ambulance Care.

Ways to save

Most HBF Hospital and Extras products automatically include cover for Urgent Ambulance. However, if you only want cover for an ambulance in an emergency, you can take out Urgent Ambulance insurance separately, without needing to have Hospital or Extras insurance.

Because Ambulance Care (the non-urgent one) is an add-on, you can remove it to help reduce your premium. However, from just $0.50/week, it would be a low reduction for something that could save you a lot of money in the future. 

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1 St John Ambulance Australia - Perth Metro Ambulance Fees (2022) - What is covered by Ambulance Insurance