However, taking out cover before the 1st of July following your 31st birthday could still save you from incurring Lifetime Health Cover loading, which makes your hospital insurance premiums more expensive if you take out cover later on.
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If you hold an eligible hospital policy on 1 April 2019, your discount is based on your age at this date. Otherwise, your discount applies to the age you are when you purchase or renew an eligible policy after 1 April 2019. You’ll then receive that same percentage discount until you turn 41, so long as you stay on the same policy.
If you move to another policy with your current insurer or a different insurer, you may lose this discount, as it is linked to specific products.
From the age of 41, your discount rate will begin to decline by two per cent every year until it reaches zero and is no longer applicable.
For example, say you took out a hospital policy at the age of 27 and received a six per cent health insurance discount. This discount will drop to four per cent when you turn 41 years old, a two per cent discount at 42, and will no longer apply once you turn 43.
Be aware that the age-based discount only applies to policies that include hospital cover. Policies that only cover care and treatment outside of hospital, known as extras cover, will not attract the age-based discount.
Also, if an insurer does offer age-based discounts on a certain policy, they must also provide the discount to everyone else who has the same policy that is of an eligible age as at the 1st April; this includes both new and existing policyholders.
With the private health insurance reforms coming into effect, it’s important you go over your policy to understand how these changes will impact you. If you are aged between 18 and 29, it’s worth checking to see if your health fund will apply an age-based discount to your cover.
If your insurer doesn’t offer the age-based discount, it’s important to find out which other funds will. Along with cover that suits your specific healthcare needs, the discount may also help ensure you’re on the most cost-effective policy, now and into the future. However, there may still be other policies without the discount that are more suitable for you and your budget.
If your health fund offers the age-based discount on your policy, you’ll automatically receive the discount based on your age when the discount takes effect (e.g. from 1 April 2019). Your discount does not take into account the age you were when you first took out health insurance.
For example, if you took out hospital insurance when you were 25 but will be 28 when the discount takes effect, you’ll receive a four per cent discount on your premiums, not a 10% discount.
If you move from a policy that has an age-based discount and you’ve had a gap in cover before you take out another with the same health fund – or you move to another health fund offering the discount – before you turn 30, you’ll receive the discount based on your current age. The gap in cover means you may lose your original discount.
Some health funds may offer a retained age-based discount, which means your original discount will apply if you switch to an eligible policy. As such, be sure you confirm with the health fund whether or not you will receive a discount before you switch.
If you and your partner are both eligible and have a couples or family policy that offers a discount, this discount will be calculated as an average of both your applicable discounts.
For example, if you have a two per cent discount and your partner has a six per cent discount, it will balance out to a four per cent discount off your couples or family policy premiums.