How to save money on private health insurance in Australia

The good news is, there are plenty of ways to save without giving up the cover you actually need.

Whether you’re new to health insurance, reviewing your current policy, or just wondering if you’re overpaying, Alfie’s here to walk you through practical ways to cut costs and still stay covered.

This is the most common mistake Alfie sees: paying extra for cover you don’t use.

Ask yourself:

• Do I need pregnancy cover?

• Do I want cover for joint replacements or heart surgery?

• Do I actually use my extras benefits?

If you’re on a Gold hospital policy but don’t need the top-tier inclusions, you might be better off with Silver Plus or even Bronze Plus, which often include a few extra treatments without you needing to fork out for a Gold policy..

The same goes for extras. If you only use dental and optical, there’s no point paying for podiatry, chiro and massage.

Tip from Alfie: Make a list of the services you actually claim each year. Then check if your policy matches your usage.

Health insurance isn’t a “set and forget” thing. Prices go up almost every year and insurers often change what’s included.

By reviewing your policy at least once a year, you can:

• Make sure you’re still on a competitive rate

• See if another fund offers better value for the same services

• Take advantage of offers or promos (like waived waiting periods)

Tip from Alfie: Even if you want to stay with your current fund, comparing gives you leverage — some insurers will offer a discount if you call and mention a better deal elsewhere.

The Australian Government helps most people with the cost of private health insurance via the Private Health Insurance Rebate. It’s income-tested and reduces your premiums automatically (or you can claim it back at tax time). Here are the rates covering 1 April 2025 – 30 June 2025 if the oldest person covered on your policy is under 65 years old.

Tip from Alfie: If you’re not receiving the rebate as a reduced premium, check with your insurer or accountant as you might be missing out.

If you take out hospital cover after 1 July following your 31st birthday, you’ll pay 2% more per year of delay, up to 70% extra.

That’s money you don’t need to spend if you take action in time.

And if you’ve already got a loading, keeping your cover for 10 continuous years will wipe it out permanently.

Tip from Alfie: If you’re in your late 20s, a basic hospital policy now could save you thousands later. Even if you don’t use it, you’ll lock in your base rate.

Your hospital policy excess is what you pay upfront if you go to hospital. Choosing a higher excess can bring down your premium as long as it stays within the government’s allowable limits for tax and LHC purposes:

• $750 or less for singles

• $1,500 or less for couples/families

Tip from Alfie: If you’re young, healthy, and unlikely to go to hospital anytime soon, a higher excess can make your policy more affordable.

Some insurers offer discounts if you:

• Pay annually instead of monthly

• Prepay your premiums before 1 April (when most rate increases take effect)

The savings might not be huge but every bit helps.

Tip from Alfie: Paying before the April premium hike can lock in your current rate for another 12 months.

Some funds have networks of preferred providers for services like dental, physio, or optical. If you use one of these, you may get:

• Higher rebates (e.g. 100% back on a dental check-up)

• Lower out-of-pocket costs

• Discounted services

Tip from Alfie: Check which providers your fund partners with as it could make a big difference in how much value you get from extras cover.

Some health funds run promotions for new customers that include:

• Waived 2- or 6-month extras waiting periods

• Free weeks

• Gift cards or cashback

Just make sure you:

• Check the policy still suits your needs

• Factor in any minimum sign-up period or cancellation restrictions

Tip from Alfie: Don’t switch purely for the bonus, but if it’s a good fit and there’s a perk, it’s worth considering.

Some funds offer combined hospital + extras policies at a discount, but don’t assume it’s always better value. Sometimes, buying them separately can be cheaper or give you more flexibility.

Tip from Alfie: If you only want extras for dental and optical, a standalone policy from a different fund might offer better value than bundling.

Saving money on private health insurance isn’t about cutting corners. It’s about making smart choices that match your needs and lifestyle.

• Review your cover regularly

• Don’t pay for services you don’t use

• Take advantage of tax savings and rebates

• Use excesses, provider networks and discounts to reduce your premium