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5 Things to Consider Before Canceling Your Health Insurance

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Georgia Carter Updated: 21 March 2022
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Cancelling your health insurance policy? Before you make any decisions, it’s important to understand the consequences of cancelling your policy. Downgrading or switching funds may not be the best solution for you – and could end up costing you more in the long run.

We want to help you find the best way to cancel your health insurance policy – without any surprises. That’s why we’ve put together a range of resources that will help you make an informed decision. This article outlines the best things to do and consider before cancelling health insurance and how to compare private health insurance.

Key facts

  • Most people cancel their private health insurance due to price increases, low benefits, or complications with their health insurer.
  • It’s important to consider several factors before cancelling your health insurance, such as waiting periods and government penalties and charges.
  • It’s recommended to speak to your health insurer about your policy options or review and compare other health insurance policies before cancelling private health insurance.
  • Try to lower your policy price before cancelling your health insurance with a health insurance comparison.

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Common reasons for canceling your private health cover

The private health market is going through a major crisis. With health insurance premiums increasing at an accelerated rate, many people are left wondering if the cost outweighs what they receive in return for their premiums – especially as there may not even be full cover available on some treatments or services. Many people, therefore, cancel their health insurance because they don’t think it’s worth the cost, or the policies are just too expensive for them. 
Another reason stands with the youth. The new generation of youthful Australians has either sworn off private healthcare altogether due to its high price tag or lack of benefits certain coverage receives. Alternatively, those who are frequent travellers often cancel their health insurance. Health insurance is a must-have in Australia, but if you’re going overseas for an extended period of time, it can be difficult to use since most policies only cover local emergencies.
Finally, one of the main reasons for cancelling your private health insurance policy lies in poor customer service. If you’ve had a bad experience with your health fund, you may not want to continue paying them.

Private health care

Why canceling your health cover may not be the best idea

Private health insurance may be a valuable financial investment. Still, it’s important to weigh the pros and cons before cancelling your health fund. Cancellation will lead you to a coverage gap with potential waiting periods that could last years if not covered by another policy or government program. For starters- outright cancellations will lead to waiting periods and additional costs when re-joining later down the line. In addition, the Lifetime Health Cover Loading charge may trigger extra taxes due to surcharges on top of Medicare Levy Surcharge.

What should you do instead of canceling?

Private health insurance is an important part of protecting yourself and your family. If you are not satisfied with what we have offered so far, there may still be options available to help maintain the cover at a lower cost or with better benefits than before. There are serveral options available before having to cancel health insurance such as changing providers altogether! You can also talk directly through phone calls if needed; however, it’s worth considering suspension (or even canceling) extra services in order to keep suitable levels for hospitals and dental care while suspensions last.

How to keep your health coverage as affordable as possible

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When should you cancel your private health insurance cover?

You can cancel your private health insurance at any given time. Canceling your health insurance is easy. But you should be aware that if you decide to cancel, the insurer will charge an administration fee, but this depends on what type of policy it was for and how long ago they canceled their coverage with them in advance. Remember to review the backlash you can receive from canceling before making your final choice. However, if you’re not claiming back , receiving benefits, and spending too much unnecessarily, then you can cancel your private health cover.

What are your alternatives?

If you’re unhappy with your current private health insurance provider but don’t want to cancel entirely, there are a number of options for maintaining cover and potentially paying less in premiums. You might consider switching providers or canceling some extras while keeping hospital benefits at an appropriate level–just make sure it’s what meets your needs.

Frequently asked questions and answers

  • What happens if you don’t have health insurance?

    Cancelation of your private health insurance policy will result in a gap in coverage with potential waiting periods that could last years. For starters, outright cancellations lead to additional costs when re-joining later down the line, as well as possible tax surcharges on top of Medicare Levy Surcharge fees – so be sure you understand all these factors before cancelling. It may be more expensive in the long run to cancel your policy
  • Why is there a penalty for not having health insurance?

    Health insurance is excellent for a number of reasons. Firstly, it protects you and your family from the heft costs of medical care, especially when it comes to in-hospital treatments and emergencies. It lowers healthcare costs in the long run and lessens lengthy waiting periods. Private health insurance cover also helps take the load off the healthcare industry in Australia, which is the main reason there are penalties for not having a policy.
  • What are the advantages of having private health insurance?

    Private healthcare facilities offer a more relaxing and comfortable experience than public ones. You can rest assured that the wait time will be shorter, so you won’t have to worry about being patients in need of urgent care or even getting treatment right away if it’s not an emergency at all. In addition, you won’t have to pay any penalty charges, and you can claim back on certain medical treatments and services.
  • How much does private health care cost in Australia?

    Hospital cover is an important part of your health care plan. It can be purchased in four different tiers: Gold, Silver and Bronze, which represent the levels that apply to you depending on what treatments are covered under this policy type before any surcharges or private insurance rebates have been applied – these averages were calculated according to prices from all states for policies with $750 excesses per single coverage holder ($1 million). The price may differ based on personal circumstances, so keep looking around.
  • How do I find the cheapest health insurance?

    You must always review and compare multiple health insurance companies and their various policies before making your final choice. One insurance company may be providing the same, similar, or better-valued policy for a cheaper price. Alternatively, you can decide to lower or remove our Extras policy and just keep your Hospital cover, and think of including gap cover to lessen the charges.

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