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One in 10 Aussies with private cover plan to switch funds this year

Are you wasting money on outdated health cover?

By Laura Crowden

March 1, 2020 - 9:00am

With health insurance premiums having increased by an average of 61% over the past 10 years,¹ it’s not surprising that more and more Aussies are shopping around for better value on their private cover.

Recent research by independent research firm Ipsos Australia found that over a third (35%) of Australians with private health insurance compared their current policy with other funds in the past 12 months.²

And with premiums set to rise again on April 1 2020 by an average of 2.92.%,³ it’s likely even more Aussies will be shopping around to see if they can find better value in the coming months.

In fact Ipsos found that a record number of Aussies intend to switch funds, with over 1 in 10 policy holders (13%) intending to switch funds in the next 12 months.⁴

Worried you’re overpaying for health cover? You’re not alone.

If you’ve been with the same insurer for a number of years now and haven’t reviewed your policy, then you could be paying too much.

In fact Ipsos found that a staggering 62% of those policy holders who switched felt they were paying too much with their previous fund.⁵

Unsurprisingly, price was the number one reason why Australians switched health funds in the past couple of years. Almost 50% of those who had switched said they were looking for a cheaper or more affordable cover.⁶

Check you aren’t wasting money on outdated cover.

Don’t set and forget when it comes to your private health insurance. Failing to regularly review your policy can result in you paying for things you don’t need or not being covered for things you do need as your health needs change.

It’s particularly important to carefully review your policy when your health needs or your life stage changes – such as deciding to start a family, kids leaving home or growing older.

The annual premium increase on April 1 each year should be your prompt to shop around and compare your current policy to see if you could find a better value option.

Don’t pay the lazy tax!

Many policy holders who initially shop around are put off changing to a more suitable policy because they think it is too confusing to switch. Ipsos found that the number one reason Aussie policy holders didn’t end up switching after shopping around is because they thought it was too complicated, confusing or difficult.⁷

As a result, many Aussies with private health insurance end up paying what we call the lazy tax – paying more than they need to simply because they don’t get around to shopping around.

Join the thousands of Aussies who’re comparing health insurance the easy way.

The good news is that switching is much easier than many people realise. iSelect’s trained health insurance consultants can help cut through the confusion and compare your current policy against many others from our range of providers to see if there is an alternative better suited to your needs and budget.*

If we can’t find you a better option from our range of policies and providers, we’ll be honest about it and tell you to stay exactly where you are.

Don’t worry, hospital waiting periods are protected.

Another common misconception that puts people off switching is concerns about waiting periods. Many people think they’ll have to re-serve waiting periods if they switch providers and so end up sticking with outdated or expensive cover. The good news is that any hospital benefit waiting periods you have already served are protected by law if you switch to an equivalent or lower level of hospital cover with another insurer.

Now is the time to compare your policy to make sure you are still getting value for money on your private health insurance.

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*iSelect does not compare all health insurance providers or policies in the market. The availability of policies will change from time to time. Not all policies made available from its providers are compared by iSelect and due to commercial arrangements, your stated needs and circumstances, not all policies compared by iSelect are available to all customers. Some policies and special offers are available only from iSelect’s contact centre or website. Click here to view iSelect's range of providers

^{Source:

1. health.gov.au – industry weighted average premium increases by insurer by year (1 April 2011 to 1 April 2020 inclusive).

2. Ipsos ‘Healthcare & Insurance Australia’ 2019, question B13c ‘How long is it since you compared the price and benefits of your health insurance with those available from other funds?’

3. health.gov.au – industry weighted average premium increases by insurer by year.

4. Ipsos ‘Healthcare & Insurance Australia’ 2019, Question B11a ‘ Do you think it is likely or unlikely that you would either drop your private hospital insurance or switch to another fund in the next 12 months?’

5. Ipsos ‘Healthcare & Insurance Australia’ 2019, question B10extra(iv) ‘Was this switch of private health insurance funds related to any of the following?’

6. Ipsos ‘Healthcare & Insurance Australia’ 2019, question B10 ‘Why did you switch health insurance organisations in the last couple of years?’

7. Ipsos ‘Healthcare & Insurance Australia’ 2019, question B9(x)g ‘Why didn’t you proceed? Any other reasons?’}