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Changing health insurance policies or health funds is easier than you might think. It could be worth considering, particularly if you’re looking for a better deal or your personal situation changes.

Let’s look at why it’s worth considering switching and how it works.

Benefits of switching health insurance providers

There are many great reasons to switch health insurers. The number one reason is to save money or to get better value out of your cover! Also, as you grow older and your circumstances change, so do your healthcare needs. You might be paying for health insurance cover options that you no longer use or missing out on benefits not provided by your current health fund.

Changes of circumstance such as planning to have kids, consolidating your bills with your partner or a change in your financial situation, could also be another reason to make the switch.

There are also several other reasons switching can benefit you – such as;

You don’t have to re-serve waiting periods

If you’ve completed your waiting periods, you won’t have to re-serve them again if you switch to the same or lower level of cover.

So, if you’re upgrading your existing hospital or extras cover, you will be subject to waiting periods for the additional services you gain from your new policy. For example, you will need to serve out waiting periods if:

  • You haven’t completed your existing waiting periods. Say you’ve waited 10 months for a 12-month waiting period for a service or benefit, you’ll need to complete the remaining two months before you can claim under your policy; and
  • You have new or upgraded benefits. So, if your old policy didn’t cover orthodontic work, and it carries a waiting period on your new one, you will need to serve this waiting period with your new fund.

If you’re switching health funds, you will need to provide the clearance certificate from your previous fund to establish your previous level of cover and the waiting periods you have served.

Reduced out-of-pocket costs

Does your new health fund have an agreement with a particular health provider? Getting treated there can help lower your out-of-pocket expenses (or gap payments), provided you’ve served any applicable waiting periods.

man discusses switching health insurance with doctor

Increased claiming limits

Depending on your policy and the health insurance provider, you may be able to find a new extras policy that has more generous rebates for particular treatments within a 12-month period.

Consider if the annual limits will be adequate for your needs. Be aware that some funds have lifetime limits for some treatments like orthodontics.

Loyalty bonuses

Many health funds offer loyalty bonuses, such as:

  • Discounts (e.g. upon sign-up, or if you pay by direct debit ).
  • Increased limits for some treatments the longer you’re with them.
  • Discounted gym memberships or movie tickets.

While you may lose some incentives from your old fund, you might gain some new ones that suit you better by switching.

Eligible rebates still apply

Any Australian Government rebate you received for your old policy will still apply to your new policy. If you’re currently enjoying a lower premium or choosing a yearly rebate at tax time, you should continue to do so – provided your income and age threshold hasn’t changed.

The table below breaks down Australia’s health insurance rebate by age group, family status and income.

 Base TierTier 1 Tier 2 Tier 3
SinglesUnder $90,000$90,001-$105,000$105,001-$140,000$140,001 +
Families*Under $180,000$180,001-$210,000$210,001-$280,000$280,001 +
Under 6524.608%16.405%8.202%0.00%
70 and over32.812%24.608%16.405%0.00%
Australian Government Private Health Insurance Rebate. privatehealth.gov.au, Australian Government, 2022.

* For families with children, thresholds increase by $1,500 for each child after the first. Families include couples, de facto couples, and single parents.

The income thresholds are indexed and will remain unchanged until 30 June 2023.

Age-based Discount and Lifetime Health Cover status remain unchanged

Changing health insurance providers will not affect your Lifetime Health Cover (LHC) status. In fact, if you’re already paying the loading, you’re paying extra for health insurance as it is – so it’s worth seeking out better value policies so you can minimise costs.

The same goes for the Age-based Discount. If you currently enjoy a percentage discount on private hospital cover, you’ll continue to do so until you hit the age limit in your forties if you move to another policy with an age-based discount. Even if you switch health insurance after you turn 30, you can keep your discount if your new insurer offers a retained age-based discount.

How do I switch health insurance?

If you’re looking to switch health insurance to save money or find a new policy that better suits your needs, the first step is to:

Through our online comparison service, you can compare policies from a range of health funds to see if a new policy could better meet your needs.

When you’ve found a new policy that you think is a better fit, the next step is to apply which is a quick and easy process. You’ll need to provide your new insurer with your membership number from your previous health fund. They will also require your Medicare card number, this will allow your new fund to start the process of applying the Australian Government Rebate which can be applied as discount to your premiums if eligible.

Once you’ve signed up, your new insurer will get in contact with your previous health fund to cancel your old policy. They will obtain a clearance certificate (sometimes called a transfer certificate) which is a record of your health insurance history including any waiting periods that you have served. You can start claiming on services that you’ve already served the waiting periods for once your new fund receives this certificate. Any payments you’ve made in advance or overpaid will be refunded.

Now that your old policy has been cancelled you are ready to start your new cover! Your memberships cards should arrive in the post shortly.

A helpful hint: Remember to cancel any direct debits to your previous health fund, this will ensure that there’s no overlap in payments.

Frequently asked questions

Can I switch health insurance at any time?

Yes, you can switch health insurance providers whenever you like. If you have paid any premiums in advance, your old fund will prorate your premiums and refund the balance. Your insurer may choose to charge you an administration fee on cancellation, although this will usually be a small, affordable sum. This means you’re not penalised for shopping around for a policy and insurer you like.

Just keep in mind you’ll have to serve any upgraded waiting periods with your new provider before making a claim. You’ll also have to serve waiting periods for any new services covered when upgrading cover. Waiting periods when upgrading to a higher level of cover apply whether you remain with the same health fund or change providers.

When should I switch health insurance?

Health insurance premiums may increase every year, typically on 1 April at the discretion of the insurance provider (within the limits set by the Australian Department of Health). This makes it an excellent time to consider a better deal with another provider. Your health fund will notify you in advance about how much you can expect your premiums to rise, giving you plenty of time to potentially move to a health fund with a lower yearly increase before 1 April. Whilst you can switch health insurance at any time, you should always ensure you choose a level of cover that is suitable for your needs.

How do I cancel my health insurance?

Should you only want to cancel your policy instead of switching, you can contact your insurer directly. You can cancel your health insurance policy at any time and your previous health fund will refund any premiums you’ve paid in advance, minus any cancellation fees.

Keep in mind that you will have to re-serve all waiting periods if you cancel your policy and re-join after the acceptable “gap in cover period” as set by each individual insurance provider. An extended absence from cover could also see you facing LHC loading on your insurance premiums if you take out insurance again; plus, you could lose an age-based discount. An alternative to cancelling your private health insurance altogether is to switch to a new fund with a lower level of cover to maintain these benefits.

High income earners will also want to be aware that they may be subject to the Medicare Levy Surcharge (MLS) if their income exceeds a certain threshold while not covered by private hospital health insurance – standalone extras cover will not avoid the MLS.

How we can help you switch

One way we help you switch is by providing a simple-to-use online comparison service, though if you feel more comfortable talking over the phone, that option is also available to you.
Once you sign up, your new health fund will act on your behalf to cancel your old policy and request your clearance certificate from your previous health fund.

Depending on the start date of your new policy, if there’s an overlap with the premiums you’ve paid your old health fund, they will refund the difference to you. Just keep in mind that you may need to cancel any direct debits to your old health fund with your financial institution.

Anthony Fleming, General Manager

Tips on switching health insurance from our health insurance expert, Anthony Fleming


  1. When considering a switch up, a good place to start is by looking at your current policy and whether it fits your situation. If you need to make a change (or even if you don’t) there’s a good chance that there’s another health fund out there offering exactly what you need with equal or greater value.
  2. There is often a lot of confusion associated with switching health insurance and its impact on waiting periods. Rest assured, when switching to a policy that offers the same or lower coverage as your old policy, you won’t need to serve them again. Having this continuity provides peace of mind for many.
  3. In most instances, your new health fund will take care of the switch for you. They will contact your previous insurer and request to cancel your old cover and ensure not only that your served waiting periods carry over, but you are also refunded anything paid in advance.

Ready to make the switch? Try our easy-to-use comparison tool today.

So, what are you waiting for?

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