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Guide To Switching Private Health Insurance in Australia

Megan Fraser Fact Checked Updated: 20 November 2023
Types of Health Insurance

Choosing to partner with a Health Insurance Provider that meets your personal health coverage requirements will ensure that you receive the care that you need, when you need it. Oftentimes, people will choose the first package or insurer that offers them a good price and decent coverage. While this does mean that you may have coverage, it may mean that you’re paying for it at a higher cost or receiving coverage that does not meet your personal requirements.

There are many reasons why Australians make the switch between health insurance providers. This could include cost, life changes, type of coverage and even customer service. Before choosing to partner with a specific health insurance provider, it is crucial to ensure that these points are researched across the board so that you can find the best insurance provider for your needs.

Key facts

  • Some common reasons Australians choose to switch insurance providers are due to the costs, customer experience, scope of coverage or even life changes.
  • There are many benefits that come with changing life insurance providers, including lowered out-of-pocket costs, no waiting periods, better coverage, loyalty benefits and the retention of eligible rebates.
  • Some of the cons that may occur when switching insurance providers could include a loss of loyalty benefits, and the inability to see your own doctor due to provider networks, amongst a few other points.
  • Signing up with a new insurer is a simple and quick process. If you apply for a policy with the same coverage level as your current one, you will not have to go through another waiting period.

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Reasons for Switching Health Insurers

While switching health insurance providers may seem like a complicated process, it is not impossible, especially with companies offering assistance during the transition and affordable pricing options tailored to individual needs. Before making a decision, it is crucial to consider which insurer best fulfils your specific requirements carefully. Below are the main reasons people opt to change their health insurance policies:

Someone may choose to switch health insurance providers for many different reasons. Some of these reasons may include:

Guide To Switching Private Health Insurance in Australia 2

Benefits of Switching Health Insurance Providers

Now that we have discussed the potential reasons why someone may choose to switch health insurance providers, let’s have a closer look at some of the benefits that may come with switching. These benefits can take on many different forms, such as cost-saving, additional coverage and loyalty benefits.

No Re-serving of Waiting Periods

The biggest reason why many Australians are anxious to switch service providers is because of the waiting periods and difficulty. These two reasons are surprisingly incorrect. Switching service providers can be done as simply as switching phone providers. Provided that you are switching to a package that is similar to your current one, if you have already served a waiting period for one provider, you do not have to serve it again when switching over to another provider. This means you will still have access to your health insurance during the switch. 

Minimize Your Out-of-Pocket Expenses: 

Switching to another health insurance provider can greatly lower your out-of-pocket expenses. There may be other providers that offer packages that are similar to your current one but at a lower monthly rate. Besides your monthly out-of-pocket cost, you can also save on the out-of-pocket costs you may have after an operation, surgery or hospital visit. Looking at the ‘no-gap’ coverage provided by each insurer is another good way to ensure that you are covered in an emergency. It is important to speak with your insurer to find out about the scope of your coverage and the pricing to ensure that costs are saved and your coverage is maximised.

Enhanced Coverage

Every insurer provides different coverage types. Sometimes, your policy may allow you to have higher limits on your claims. Other insurers may provide better options when it comes to ‘no-gap’ coverage and the lowering of your out-of-pocket costs. Although the tiers may be similar, each insurer is different and offers its clients different packages that are tailor-made to fit individual requirements. Identifying and comparing your needs with the coverage that an insurance provider offers will grant you enhanced coverage that meets these personal needs while saving you on costs.

Benefiting from Loyalty Bonuses

Many health insurance providers offer loyalty bonuses to clients who remain with them for a long period of time, for using their apps, being a policyholder or even completing health challenges that they might set. These rewards are called loyalty bonuses. Some examples of these programmes could be Medibank’s Live Better reward programme, HCF’s Thank You programme or the nib rewards programme. Each one is different and grants you different types of benefits. 

While these are not all of the loyalty bonuses out there, asking about a provider’s potential loyalty bonuses is an excellent way to receive additional benefits that may assist you in various ways. 

Retain Eligible Rebates

If you receive any rebates from the Australian Government towards your health insurance, it will still apply to your new policy when you choose to make the change. These rebates will remain in place as long as your age and income thresholds have not changed.

Pros and Cons of changing providers

You may be eligible for sign-up rewards with certain insurers.Loyalty rewards that have been accumulated with your current insurance provider may be lost during the switch.
If you retain your hospital cover in the future, your Lifetime Health Cover will not be affected.You may not be able to see your own specific doctor if your new provider uses a provider network.
Depending on your policy type, an insurer may greatly assist you in reducing the total out-of-pocket costs that you may have.If you choose to upgrade your policy, you will have to serve the waiting period mentioned in your policy.
If you change to a policy of the same level as your current policy, you will not have to go through the waiting periods again.Depending on your policy, it may have benefits that are no longer available. These benefits may be lost during the switch.
Different insurance providers may be better suited to providing coverage for your specific needs. Switching providers could grant you additional benefits and a much greater form of coverage that is more tailor-made to your current phase of life.You may have to pay an LHC loading fee when applying for your new policy if you incur more than 1,094 days without cover.
Guide To Switching Private Health Insurance in Australia 1

How to change your insurance provider

  1. Compare quotes from each insurance provider. Having a good understanding of what each insurance provider offers, what the average costs are and what benefits you may receive from switching will greatly assist you in your decision-making process.
  2. Once you have found an insurer that matches your personal requirements, applying directly to the insurer will be your next step. Let the insurer know that you are making the new switch over and would like the new cover to begin once the old one has ended.
  3. Your new insurer may require a few important documents from you. Getting these documents ready and signed off will ensure the process is handled swiftly and seamlessly. Your previous insurer will typically provide you with a transfer certificate. This certificate outlines the current coverage that you have and should be finalised within 14 days.
  4. The next step is cancelling your current health insurance provider coverage. Some insurance providers may handle this step on your behalf, but if you are worried about the process, doing a simple check-in will help ease this anxiety.
  5. Once your previous coverage has ended, your new one will begin. When your new policy begins, the benefits discussed may be available to you, and the premiums will be removed from your account to pay for the policy.

Frequently asked questions

  • Why do Australians switch their health insurers?

    The decision to switch health insurers could result from numerous different reasons. Some of these reasons could be a result of coverage type, having a bad experience with the insurer, or seeking a more cost-effective policy or even better benefits.
  • What is the process of switching health insurers in Australia?

    The process of switching health insurers is simple and rewarding. First, researching policies and insurers will ensure that you have all the information needed. Next is the direct application to the insurer. Once you have applied, it is important to get the required documentation in order before the switch. Letting your current insurer know about the switch and cancelling your current coverage is the next step before the commencement date of your new policy. When the new policy begins, you may have access to your chosen policy’s benefits and the premiums will begin to deduct from your account.
  • What are the potential challenges faced when switching health insurers?

    Some of the issues that you may face when switching insurers could be policy mismatches which occur when the policy does not directly match the policyholder’s needs. Waiting periods may occur when upgrading to a coverage type higher than your current one. Coverage gaps that occur when the coverage does not completely meet all of the policyholder’s needs or does not meet them as well as the previous policy. The easiest way to avoid these issues is to do as much research into the policy as possible and have an in-depth conversation with your chosen health insurance provider. Having the necessary information before the switch will stop the potential challenges from arising before the commencement of the new policy.
  • How do I compare different health insurance policies effectively?

    To effectively compare different health insurance policies there are a few key questions that you should ask yourself. What does it cover and what does it not cover? What are the benefits of one policy versus the benefits of another? Is the policy more or less cost-effective than your current policy? Does it meet your financial needs and does it provide the right level of coverage for the price that it entails? Do customers actively recommend the policy or is it consistently negatively reviewed?
  • What should I consider regarding waiting periods when switching insurers?

    There is no waiting period if you are switching to a policy that is at a similar coverage level to your current policy. You will however have to go through the waiting period if you upgrade to a policy that has a higher coverage level than your current policy. When switching policies, it is best to choose a policy that matches your current policy. This will ensure that you still have continuous coverage in the event of an emergency. Speaking to your chosen insurer about the waiting periods before switching will also ensure that you are not caught by unexpected circumstances and left without coverage.

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