Millions of Australians are set to pay more for health insurance from 1 April, but alarming research from Compare the Market shows those who stay loyal could be paying significantly more than those who compare and switch policies.
Research from Compare the Market’s recent Household Budget Barometer shows that Australians surveyed who had been with the same provider for over 10 years paid an average of $306.88 per month on premiums. Meanwhile, people who had purchased cover a year ago spent $237.84 per month on average.
This difference of $69.04 every month adds up to an annual gap of $828.48, meaning long‑term loyal customers are paying 29% more than recent switchers.
And with some experts warning this year’s premium adjustment could be the highest in years, Compare the Market’s Economic Director David Koch said Aussies need to ensure they’re not being stung.
“Australians who stick with the same insurer may think they’re being rewarded, but when premiums increase year-on-year, that’s often not the case,” Mr Koch said.
“Often the best perks are reserved for new customers and that means Aussies who stay loyal could be missing out.
“Your insurer isn’t going to tell you if you’re shelling out more than you need to. It’s up to you to take control and look for better value.”
Mr Koch said “setting and forgetting” could be a costly trap.
“People often keep their Gold cover as a ‘just in case’, or because they think that the highest level of cover must be the best, only to discover they’re paying an arm and leg for things they will never use,” Mr Koch said.
“The number of people I speak to who have cover for pregnancy when they’re well into their 50s and 60s is outrageous. I was one of them until my wife pointed it out.”
He said Aussies should review their cover every 12 months or whenever they receive a notice about a change to their premium.
Compare the Market figures show Australians surveyed spend an average of $255.67 per month on health insurance (a hospital, extras policy or a combined hospital and extras policy), equivalent to $3,068.04 per year.
Mr Koch said Aussies shouldn’t be scared about having to re-sit waiting periods or worry about losing the quality or continuity of cover. If you switch to the same level of cover (or lower) with a different provider, you do not need to re-sit waiting periods.
“We’re not talking about cutting back on the care you need — it’s about getting better value. You might be surprised how much you can save by switching to something more appropriate.”
Aside from the annual premium adjustments, several factors can influence what you ultimately pay for health insurance, including:
- Selected excess – the upfront cost paid when claiming hospital cover.
- Type and level of cover – higher tiers covering more services cost more.
- Australian Government Rebate eligibility – an income‑tested rebate that helps pay for insurance.
- Age‑based discounts – available to reward those aged 18–29 who take out hospital cover when they’re younger.
- Lifetime Health Cover loading – 2% loading added to hospital premiums every year for those who take out hospital cover after the first of July after turning 31.
- Insurer pricing strategies – including incentives for new customers.
- Family composition – couple and family policies may cost more than single plans and rules for dependents vary by fund.
- State or territory of residence – medical costs differ depending on where you live.
Mr Koch’s top tips for paying as little as possible for health insurance
- Don’t stop comparing — even if you think you’ve got a good deal
If your premiums jump, take the opportunity to check what else is out there. Never accept an increase without exploring alternative policies first, as you might find the same level of cover for a lower price. - Keep an eye out for special offers
Health funds are always trying to win new customers, often offering incentives such as waived waiting periods for extras, a few weeks of free cover, access to reward programs, and more. These perks can genuinely boost the value of a policy. Just remember that they’re usually aimed at new members, which can make switching worthwhile.
- If you’re not using a benefit, consider dropping it
Instead of cancelling your insurance altogether when premiums rise, trim the parts you don’t need. A more streamlined policy might still cover your essentials at a lower price. - Similar policy names don’t guarantee the same inclusions
Two policies might sound alike, but the fine print can be very different. Check the inclusions, exclusions, waiting periods, limits, and excesses carefully. You’ll find the details in the policy brochure or by calling your health fund directly.
For more information, please contact:
Phillip Portman | 0437 384 471 | [email protected]
Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.
