Managing your policy

It's important to regularly review your health insurance requirements at different stages in your life to check whether you have a policy which is suits your healthcare needs and which covers the treatments you may need.

Although premiums are a factor to consider, it's also important to check what is and isn't included on your policy, and whether excesses, co-payments and benefit limits will influence the total cost to you for any treatment. The cheapest policy may not necessarily be the best or right for you.


It's important to regularly review your health insurance requirements at different stages in your life. The policy that suited you when you purchased it may no longer meet your healthcare needs or cover the treatments you want to include.

When shopping around for health insurance, you should consider what level of cover you need, who is to be covered, the services you require, and whether you are willing to reduce your premium by paying an excess each time you go to hospital. 

Be sure you consider more than just your premium - consider how comprehensive the cover is, excesses, co-payments and benefit limits will influence the total cost to you for any treatment. The cheapest policy may not necessarily be the best or right for you.

Lowering your premiums

If the cost of your insurance has become a concern, there are many ways you can manage your policy to allow you to have lower premiums.

Some health insurers provide discounts depending on your situation, rate protection if you pay in advance and if need be you may be able to suspend your membership for a time rather than fall behind in payments.

Some health insurance policies will give you full cover for the costs of hospital accommodation and in-hospital medical charges. Other policies require you to meet some of the costs, in exchange for lower premiums. You can agree to:

  • not be covered for certain services (exclusions), or
  • only receive limited benefits for a certain service (restricted benefits), or
  • pay a set amount towards the cost of your hospital treatment (excess or co-payment).
As with any other insurance policy, you can manage your cover by choosing comprehensive cover with higher premiums, or pay lower premiums for reduced cover. You can also reduce your premiums by opting to pay some of the costs through an excess or co-payments. 


If your policy has an exclusion for a particular condition, you are not covered for treatment as a private patient in a public or private hospital for that condition.

For example, if your policy excludes pregnancy, hip replacements and knee replacements, and you go into hospital as a private patient for one of these conditions, your health insurer will not pay any benefits towards your hospital and medical costs.

If you need treatment for an excluded service, your options would be to seek treatment as a public patient or to cover the full cost of the treatment yourself.

Restricted Benefits

If your policy has restricted benefits for some conditions, you will be covered for treatment for those conditions but only to a limited extent. You will face considerable out-of-pocket costs if you have this treatment as a private patient.

If you need treatment for an restricted service, your options would be to seek treatment as a public patient, or as a private patient in a public hospital or to cover some or most of the cost of the treatment yourself.


An excess is an amount of money you agree to pay for a hospital stay, before health insurer benefits are payable. This is sometimes referred to as a front-end deductible.

For example, if your policy has an excess of $200, you will be required to pay the first $200 of your hospital costs should you go to hospital as a private patient. An excess may apply every time you go to hospital in a year, or may be capped at a total amount that you will have to pay in a year.


With a co-payment, you agree to pay a set amount each day you are in hospital. This can also be referred to as an overnight excess, daily excess or patient moiety.

For example, a policy may have a co-payment clause that requires you to pay the first $50 for each day of hospital accommodation. If your policy has such a co-payment and you were in hospital for five days, you would have to pay $250 ($50 x 5). The total amount of co-payment you pay per hospital stay is often limited to a set maximum amount.


Health insurers may offer discounts on premiums for people who:

  • pay their premiums at least three months in advance;
  • pay by payroll deduction;
  • pay by pre-arranged automatic transfer from an account;
  • have agreed to communicate with the private health insurer and make claims under the policy by electronic means;
  • belong to a contribution group under the rules of the insurer, e.g. your health insurance product is organised through your workplace or an organisation you belong to; and
  • where the insurer is not required to pay a state or territory levy (e.g. if you are a pensioner or a low income earner in New South Wales or the Australian Capital Territory, your premium may be reduced because you are entitled to free ambulance cover).

Check with your health insurer to see if you are eligible for any of these discounts.

Rate protection

If you can pay your premiums 12 months in advance, some insurers will offer a rate protection policy.

With a rate protection policy, if the rates are increased within the 12 months you have already paid you will not have to pay the increased rate until your 12 months of cover ends.

If you do not have a 'rate protection' policy, the insurer will ask you to pay the balance owing on the new rates, or reduce the length of time your advance payment covers. 

Failure to pay

If you fall more than two months behind in paying your contributions, your private insurance will lapse and you will not be insured.

Some insurers may not accept payment of arrears in excess of two months. When you resume your payment, the insurer may impose further waiting periods before you can claim benefits again.

Suspending your membership

Health insurers may grant suspensions for an agreed period of time, at their own discretion, for circumstances such as working or studying overseas, financial hardship or temporary unemployment.

During the suspension you will not be able to claim and if you are over the income threshold you will be required to pay the Medicare Levy Surcharge for that period. Suspension rules differ between insurers so you should check to see if you will need to serve any waiting periods again.

Suspending your membership with the agreement of your health insurer will not affect your Lifetime Health Cover  (LHC) entitlements, meaning that for LHC purposes you are taken to be retaining your hospital cover. If you are paying a LHC loading at the time your membership is suspended, any period of suspension does not count towards the 10 years before your LHC loading is removed. 

Keep your details up to date

Always let your health insurer know about any changes in your circumstances that might affect your cover. This includes change of address or contact details, adding newborn children to your policy, or advising of a change in Medicare status.

Keeping your health insurer informed about changes in your circumstances can help to avoid problems when you need to use your health insurance.

To make sure you receive notification of any changes to your cover, notify your health insurer if you change your postal address or contact details.  If you move interstate, this might affect the amount of premiums you pay or the benefits you are entitled to. 

Leaving or moving insurers

If you want to move from one insurer to another, you will not have to re-serve waiting periods if you transfer to a policy that is at the same or a lower level of benefit. 

  • Your new insurer must give you continuity for the waiting periodsyou have already served. However, if your new plan includes new or higher benefits that were not part of your old policy, you will have to complete a waiting period before you can access those benefits.
  • Benefits paid by the previous insurer may be taken into account by your new insurer when it determines your annual benefit limits.
  • Transferring between insurers will not affect your Lifetime Health Cover (LHC) entitlements, provided that you transfer from hospital cover with your existing health insurer to hospital cover with the new health insurer.
  • If you decide to cancel your policy, your health insurer should pay back any contributions you have paid in advance. The insurer may deduct a small administration charge.
When you change insurers, make sure you request a copy of your Clearance Certificate (also known as a Transfer Certificate) from your old insurer to provide to your new insurer. This is a record of your membership, which will ensure you retain continuity of your waiting periods and LHC entitlements.