Switching Health Funds

Finding the right health insurance policy is often so daunting that people keep the same policy year after year, without considering their changing medical needs. By comparing and possibly switching health funds, you could find a policy that better suits your current needs, saves you money and best of all, it's really easy to do. In fact, the Private Health Insurance Ombudsman recommends that you review your health cover every year to make sure you're still getting the cover you need at a price you can afford.

* Ref: Private Health Insurance Ombudsman, "Right to Change", accessed 04 Dec 2011.

Why switch health funds?

There are many reasons why you might consider changing your health insurance policy, including:

Changing needs

Your health cover needs change along with your lifestyle. For example, if you're thinking of starting a family, you'll need to make sure you're covered for pregnancy and birth-related services. Or as you get older, you may want to add things like hip replacement and cataract surgery.

Changing benefits

Every year around 1st April, all health funds review their policies and often make changes to their premiums, benefits and conditions of their covers. You'll receive notice prior to the changes and you may decide that the new benefits are no longer adequate for you.

Save money

By comparing regularly, you can make sure you've obtained the most cost-effective health insurance policy to suit your needs. Switching health funds could save you money, as well as ensuring that you get a policy that better suits your lifestyle and medical needs.

What you need to know about switching

Your new health fund does the paperwork

Something that many people don't know about switching health funds is just how easy it is.

Simply find and apply for the health insurance policy you want to switch to, and your new health fund will manage your transfer. Once you give your new fund authorisation, they will take care of the transfer with your old health fund by cancelling your old policy and retrieving your membership details. Any portion of unused premium that you may have already paid to your old health fund will also be refunded to you.

The only thing you may need to do is contact your financial institution to cancel any direct debits to your old health fund.

Waiting periods are waived

Waiting periods that you have already served with your old health insurance policy are waived by your new health fund when you switch health insurance, as long as the benefits are equal or lower.  In certain circumstances, you may need to serve waiting periods for your new health cover, for example:

  • Original Waiting period not completed: If you have waited 7 months for a benefit with a 12 month waiting period on your old health insurance policy, once you switch, you will be required to wait the outstanding 5 months before the benefit is available with your new health fund.

  • Higher Benefits with your new Health Insurance: If you need to go to hospital for a procedure that your new policy fully covers but is not covered on your old policy, then your old policy's conditions will still apply until you complete the waiting period stipulated on your new policy.

Lifetime Health Cover is unaffected

You'll keep the same Lifetime Health Cover status when you switch health funds, provided that you maintain Hospital Cover.  

Ref: Private Health Insurance Ombudsman, "Right to Change Brochure", accessed 04 Dec 2011.

These articles are provided as reference material to allow more informed decision making, but are not intended as being a complete source of information on any topic. All readers should make their own independent analysis on the topic to make sure they have considered the aspects that are important to them.