Health insurance: what to consider when buying

Health insurance: what to consider when buying

Nobody wants to pay for something they don’t need. Before you commit to a health insurance policy that doesn’t suit you, run through this list of considerations to make sure you end up with the right cover for your needs and budget.

Your life stage

Health insurance can give you access to additional medical services outside of hospital for less such as dental, optical and physiotherapy. But you may find you need a different level of extras cover depending on your life stage.

For example, dental cover may be more appropriate for a family with growing kids, but optical may be more cost-effective to have as you age.

Always ask your fund if it’s an easy process to change from one extras level to another.

Download our free 5 Minute Guide to Health Insurance for more on health insurance benefits.

Lifetime Health Cover loading

The government encourages Australians to buy health insurance at a young age to help keep the public health system sustainable.

If you buy hospital cover after July 1 following your 31st birthday, you’ll have to pay Lifetime Health Cover (LHC) loading. This means your premiums will be an extra 2 per cent more expensive for every year of your age you’re over 30.1 The maximum loading is 70 per cent and is removed after 10 years of continuous hospital cover.

April rate rises

Health funds request a review from the government annually to combat the increasing costs of an aging population, rising chronic diseases, and new medical technologies.

Reviewed premium rate rises come into effect on the 1st of April every year, making the lead up months your best time to assess your health insurance. If you’re not happy with the rise, compare providers to see if you can find a better deal elsewhere.

Avoid the rate rise by checking with your provider to see if you can pay one years’ worth of premiums up front before April 1.

Household income

If your taxable income is over $90,000 for singles and $180,000 for families, and you don’t hold private health insurance, you will have to pay a Medicare Levy Surcharge of 1–1.5 per cent depending on your where you fall in the threshold.2

This is in addition to the 1.5 per cent Medicare levy all taxpayers pay, so it helps to know what you need and want before your as your salary changes over the years.

Your budget

Keep your budget in check with these health insurance considerations:

  • Do you really need extras cover? Scrap services from your policy you’re not using such as optical or physiotherapy.
  • Consider increasing your excess payment for a lower premium.
  • Shop around for policy bonuses, and don’t hesitate to ask your health fund if they offer discounts for setting up a direct debit.

Potential insurers

Research your short list of insurers to learn more about their quality and credibility. Learn more about their time in the market and reputation, and look out for industry awards and association with industry code of practices.

Always read and make sure you understand your insurer’s fact sheets. They’re there to help you understand what you’re covered for and what’s excluded from your policy.

Learn more about health insurance quickly and easily! Download our free 5-Minute Guide to Health Insurance now for all the need-to-know details.

Download the eGuide now


  1. Lifetime Health
  2. Income thresholds and rates for the Medicare levy surchargeAustralian Taxation Office

Posted: 15 Jun 2018

This is general information only and does not take into account your personal objectives, financial situation or needs. You should consider the relevant PDS available on this website prior to purchasing any product. Choosi offers insurance products from a range of brands but does not compare all products available in the market.


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