The ultimate guide on how to switch your health insurance
In this guide, we'll answer your most pressing questions about health insurance and walk you through the process of switching providers.
by Gary Andrews
Last update 15 Apr 2021
Australia has one of the best healthcare systems in the world, offering free and low-cost access through the public health system.
This is complemented by the private sector, that covers more than 11 million people (44% of the population are covered).
But just because you're covered, it doesn't mean you're getting value for money.
In 2019, 8% of people switched health funds because their premiums have crept up with the annual rate rise, they're paying for extras they don't need, they need a different type of cover, or they simply think they can get a better deal.
Switching health cover doesn't need to be a hassle though.
If you're smart and know what to ask, you could substantially lower your premiums with minimum hassle and without needing to serve new waiting periods.
Before we get into the ins and outs of switching, let's look at why you might take out health insurance.
When we talk about private health insurance, we're actually talking about two different types of cover: hospital cover and extras.
Hospital cover helps you pay for treatment and accommodation in hospital if you're ill or injured.
This includes the ability to choose your doctor and hospital, your accommodation, and flexibility around wait times for elective (non emergency) surgeries.
You can read more about hospital cover here.
Extras cover helps cover the cost of services that you may need but aren't covered by Medicare.
This includes common treatments such as dental, orthodontics, physiotherapy, glasses and contact lenses, and podiatry.
Essentially, it helps cover you for out-of-pocket expenses and, if you use your extras wisely, can help you save money over the course of a year.
In some states, you may also need to take out ambulance cover otherwise a ride to hospital can end up being seriously expensive.
Queensland and Tasmania costs are covered by the state government, so you shouldn't need this cover if you live in either of these states.
You can read more about ambulance cover here.
Everybody's requirements will be different but you can make sure you're financially protected should you get injured or become ill and require medical treatment.
And once you've chosen a health insurance provider, that doesn't mean you need to stick with them for life.
Your health needs will change over time and, due to the annual rate rise, the cost of your policy will creep up over time.
That's why comparing your options and switching funds could lead to you paying lower premiums while getting better benefits.
Of course, it isn't as simple as throwing a dart at the wall and picking whichever provider it lands on.
There are 38 private health insurers in Australia right now, with some being open to the public and others restricted depending on your circumstances.
For example, CBHS Health Fund is reserved for current and former employees of Commonwealth Bank and their family members, while Defence Health is only open to members of the armed forces and their families.
With such a diversity of options, it can be a long and tedious process finding out which provider best suits your needs.
Yes, you can do it yourself -- but expect to spend a serious amount of time investigating different options in order to get the best deal.
One way to cut the hassle is to let a service like Compare Club do the hard work for you.
We'll search our panel of trusted insurers to find a policy that covers your needs at an affordable price.COMPARE & SAVE
Just because you're currently with a particular health insurance provider, that doesn't mean you're locked in forever.
If you find a better alternative, you won't be penalised for shopping around.
Generally, you can switch at any time without incurring additional charges.
It's a consumer's market -- so take advantage of the competition!
Even better, if you've already paid some premiums in advance and you decide to switch, your insurer will calculate the difference and refund the remaining balance, usually in full.
Just remember that your unserved waiting periods will transfer to your new provider.
So if you end up switching health insurance on an equivalent cover, you may need to finish these waiting periods before you can make a claim.
There are a couple of different ways you can switch health insurance providers.
The first way is doing it yourself. You'll shop around for a better deal and then contact your new provider to advise them of your intentions.
If you already have private cover, you can transfer to an equivalent cover with a new provider, without having to serve any new waiting periods.
The alternative -- and easier -- option is to hand over all the hard work to a specialist comparison service.
You'll enter a few key details like your life stage (single, couple, family, etc.), age, postcode, your current health fund and the type of cover you're looking for.
A health insurance specialist will then hunt down a list of funds that match your needs and complete all the paperwork for you.
Once you've chosen a new fund and the wheels are in motion, your former health insurance provider will generate a clearance certificate for your new insurer.
This will include the type and level of cover, the dates you joined and cancelled, a history of the waiting periods you've already completed, your claims and other key information.
One of the advantages to health insurance is that you can switch, and upgrade or downgrade your cover at any time.
It's entirely up to what suits your circumstances.
However, regardless of whether you're switching or staying with your existing provider, you'll need to serve new waiting periods before making a claim when you upgrade your cover.
So if you want to raise your level of optical cover from $200 to $300, you'll need to serve the waiting period before you can access the full amount.
That said, you can still claim up to the level of cover you were on before, providing you've already served those waiting periods.
In this example, if you upgraded your optical cover you could still claim back two thirds of the costs on a $300 pair of glasses immediately, but you'd need to serve your new waiting periods before you could claim the full $300.
Unlike other countries, in Australia, you don't need to reapply for private health insurance simply because you move interstate.
If you are happy with your current provider and level of cover, then you can stick with it after moving.
That said, you will need to advise your provider about the move.
They will require your new postal address (for personal information and to send you relevant materials regarding your policy), and it may impact how much you pay in premiums.
This is because of each state and territory in Australia running its healthcare system in its own way.
For example, states that have more people of working age and a younger population on average typically have lower healthcare costs, which can reduce your premiums. The opposite is also true.
It's also worth checking if your health fund has an agreement with your local hospital.
If they don't, you may have to make a long journey to get the treatment you need at a cost that's acceptable to you.
In this instance, it can be useful to see if you can move to a health fund that gives you more local options.
Ultimately, if you move interstate and are unhappy with the revised premiums from your current provider, it could be time to switch health insurance.COMPARE & SAVE
The bottom line is no, your private health insurance in Australia will not cover you for any medical or hospital expenses incurred while overseas.
That includes accidents and illnesses, as well as pre-planned medical trips such as travelling to another country for cheaper cosmetic surgery.
If you are travelling overseas for business or pleasure, you can still get financially protected in case of injury or illness - it just won't happen through your health insurance.
Instead, you'll need to take out a separate travel insurance policy and ensure the level of cover you are paying for will protect you for all the necessary services.
Examples of overseas costs may include emergency hospital visits, surgical fees, ambulance transport and even additional travel costs.
You will also be privy to subsidised costs for essential healthcare if travelling to one of the 11 countries under a Reciprocal Health Care Agreement - these include popular holiday destinations like the United Kingdom, Italy, New Zealand and the Netherlands.
The cost of premiums is an obvious consideration when thinking about switching health insurance, but it shouldn't be the only factor in your final decision.
You'll want to think about:
Length of waiting periods: If you're moving to equivalent or lower cover, you shouldn't need to serve any new waiting periods.
However whenever you increase your level of cover, you may be required to sit out new waiting periods.
Keep this in mind when switching, especially if you intend to make a claim soon after switching providers.
Level of cover: Not all health insurance providers are created equal, and you may find that another fund has a better product that meets your healthcare needs.
Gap payments: Before switching, find out whether your new fund will require you to use particular hospitals or medical practitioners who have a mutual agreement with the insurer.
If you decide to use a different hospital or service provider than the ones that have partnered with your insurer, you may be hit with out-of-pocket expenses.
Premiums: Cost is typically the biggest factor when switching, and it's important that you get good value from your health insurance provider.
However, you should also be covered for your needs for the price you are paying.
Loyalty bonuses: If you've been with the same fund for a long time, you may have accumulated bonuses or discounts for your loyalty.
Consider whether it's worth forgoing these if you decide to switch.
Loyalty tax: On the flipside of bonuses, if you've been with the same health fund for several years, you'll have gone through a number of annual rate rises.
This means that you may be able to get the same level of cover, but cheaper, with a different fund.
Your health needs now and into the future: It's worth thinking about your future and investigating what sort of services you may need in the coming years.
For example, do you have back issues that could be improved with regular physiotherapy?
Or do you have kids who may need orthodontics care in the near future? If so, make sure you have the right cover for these services.
There's no one-size-fits-all approach when it comes to health insurance.
The level of cover and the cost of premiums for one person will not be the perfect match for everyone else, so it's important to compare your options.
That said, comparing and reviewing all 38 health funds in Australia is an arduous task - and we get it, no one has time for that.
That's where we come in.
At Compare Club, you'll spend just a couple of minutes entering your details before we do the heavy lifting and give you the best health insurance providers for your circumstances from our panel of trusted Australian insurers.
Ready to switch to the ideal health fund? Start comparing right here.
This depends on how you decide to go about switching health insurance providers. It can be quick, simple and easy though.
If you choose to do everything yourself, you'll need to set aside enough time to do all the research and comparisons.
You'll also need to handle all the administrative tasks -- such as contacting your current health fund and new provider, preparing all the necessary information, and doing any paperwork to complete the switch.
On the other hand, if you go with a free service like Compare Club, you'll have everything taken care of for you.
That means less time spent researching and filling out forms.
All you'll need to do is provide a few personal details -- which shouldn't take more than a couple of minutes -- and our experts will show you the best policies for your needs, from our panel of trusted insurers.
Once you've made a decision, simply tell us which policy you want to go with, and we'll take care of the rest.
Our dedicated concierge team can help make the transfer easier and fill in all your paperwork for you.
Generally, switching should be hassle free.
That said, it's not uncommon for people to decide that they want to push back their start date after opting to switch.
Perhaps you've decided that you want to make a claim before switching funds.
Or maybe you just realised you'd forgotten to include an extra you'll really need.
While adjusting the start date of your new cover can often be achieved , it's up to your old insurer to decide if they're willing to keep you covered for a bit longer and there's no guarantee they'll say yes.
If you're planning to make a claim in the near future, it may be worth waiting a few weeks before switching.
That way you'll still save money on your annual policy but won't be left out of pocket when you make a claim.
Depending on your old fund, it may take anywhere from a few minutes to a few days to switch your health insurance.
If you're doing everything yourself, it will probably take longer to organise all the necessary paperwork and to contact the relevant providers.
Using a comparison service can speed up the entire process.
When your old fund learns that you want to switch, they may contact you to convince you to stay with them.
If you still want to switch then your old insurer must provide a clearance certificate to your new health insurance provider within 14 days.
At Compare Club, our Concierge Team will take care of this.
You'll also have the benefit of a 30-day cooling-off period.
That means if you're unhappy with the switch, you can back out of the policy within 30 days, providing you haven't made a claim with your new insurer.
The good news is that if you've been with a private health insurer for 12 months already, then you probably won't have to endure more waiting periods - so long as you switch to a. equivalent comparable policy.
If you decide to increase your coverage and have already completed the waiting periods on your old cover, you'll likely have to serve waiting periods for the increased portion of your cover.
Waiting periods can differ from insurer to insurer, but the Private Health Insurance Ombudsman [PDF] has detailed information on the maximum waiting periods for hospital cover, obstetrics (pregnancy) and pre-existing conditions.
This will clarify the length of time you may have to wait before you can make a claim.
Making the switch to a new health insurance provider is a big decision, so it's important that you understand what your new fund is offering.
However, there may be circumstances where you wish to back out of the switch or return to your old provider.
When you start the process of switching, you will likely receive a phone call from your current health insurer discussing why you are looking to move elsewhere.
If you decide to go ahead with the switch but then change your mind - don't worry.
As long as you are still within the 30-day cooling-off period that health funds must legally abide by, you will be able to back out of the new policy, providing you haven't made a claim with your new insurer.
While these safeguards are very helpful, it can be a painful process to have to start comparing health funds for a second time.
That's why it can be easier to let the experts take care of the switch for you.
In April 2019, new legislation led to the introduction of health policy reforms to improve the customer experience.
As of 1 April 2020, all health funds now offer their hospital cover policies in one of four tiers: Gold, Silver, Bronze and Basic.
As the name suggests, Gold health insurance offers the highest coverage across all tiers, although it is also the most expensive.
Depending on your current circumstances, Gold cover may be a sensible choice -- particularly if you are wanting to start a family, are struggling with your weight, or you're moving into your senior years.
So what does Gold health insurance provide?
In addition to everything covered under Silver, Bronze and Basic packages, you'll also have access to treatments for:
In addition to these benefits, those with Gold health insurance enjoy unrestricted coverage and are free to downgrade whenever they want.
It's easy to sit back and not worry about whether you're getting a good deal on your insurance, but when it comes to health funds you could be losing out on several benefits -- not to mention paying higher premiums than you need to.
Ultimately, we regularly compare our car and home insurance, so it's good to get into the habit of seeing if you can find a better deal on your health cover.
So, are you ready to find a health insurance policy that complements your current lifestyle and healthcare needs?
Comapre Club compares policies from our panel of trusted insurers to help find the most appropriate cover for your particular circumstances at an affordable price.
Get started online today or give our health insurance specialists a call on 1300 163 402.COMPARE & SAVE
This guide is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.