Is switching health funds worth it?

Having private health insurance doesn’t mean you have to stay with the same health fund forever.

Your healthcare needs, budget and priorities can change over time, and the cover that suited you a few years ago may not be the best fit for you today.

Switching health funds can give you an opportunity to find cover that better suits your needs, but there are a few things worth understanding before you make the move.

This article explains how switching health funds works, what happens to your waiting periods and what to consider when comparing your current cover with another fund.

Key Points

• You can switch health funds at any time.
• You won’t need to re-serve waiting periods you’ve already completed.
• Waiting periods apply when you move to a higher level of cover or include new benefits.
• When comparing funds, look beyond price and consider what you’re covered for, benefits, limits and excesses.

Why might I consider switching health funds?

There are plenty of reasons you might start looking at other health funds. Your healthcare needs may have changed, your premiums may have increased or your current cover may no longer include the things that are important to you.

You might also be looking for better benefits, different limits, a lower excess or a different level of service from your health fund.

Even if you’re happy with your current fund, comparing your cover from time to time can help you understand what else is available and whether your current policy still suits your needs.

Switching funds isn’t always necessary either. Your current health fund may have another level of cover that better suits your needs, so it’s worth looking at all of your options before making a change.

Can I switch health funds at any time?

Yes. You can switch health funds at any time, even if you’ve already paid your health insurance premiums in advance.

You can switch your Hospital cover, Extras cover or both, and you don’t have to move to the same type or level of cover you currently have.

You can also have Hospital cover with one health fund and Extras cover with another, so you’re free to choose the combination that works best for you.

Before switching, it’s worth comparing what your new policy includes with your existing cover, particularly if you’re currently receiving treatment or regularly claiming on your Extras cover.

How do I switch health funds?

Once you’ve found a new health fund and cover that suits you, switching is a straightforward process.

When you join your new fund, let them know you’re transferring from another health fund and when you’d like your new cover to start. Your new fund will arrange a Transfer Certificate from your previous fund, which provides information about the cover you’ve held.

Your previous health fund is required to provide the Transfer Certificate within 14 days. This allows your new fund to recognise the waiting periods you’ve already served and your Lifetime Health Cover history.

If you’ve paid premiums in advance with your previous fund, any amount you’ve paid beyond your cancellation date will be refunded to you.

Will I have to serve waiting periods again if I switch health funds?

No. When you switch health funds, you won’t need to re-serve waiting periods you’ve already completed for the same level of cover.

Your ability to transfer between health funds without re-serving waiting periods for the same level of benefits is protected under Australia’s private health insurance portability rules.

To maintain continuity of your cover, it’s important that there isn’t a break between leaving your old health fund and starting with your new one.

If you move to a higher level of cover or your new policy includes benefits you weren’t previously covered for, waiting periods will apply to the new or increased benefits.

For example, if you’ve already served the waiting period for joint replacements with your current fund and move to another policy that includes joint replacements, you won’t have to serve that waiting period again.

If you’re partway through a waiting period when you switch, the time you’ve already served will also count towards the waiting period with your new health fund. For example, if you’ve served 6 months of a 12-month waiting period for Major Dental, you’ll have 6 months remaining at your new fund.

What happens to my Extras limits when I switch health funds?

Switching health funds doesn’t automatically give you a fresh set of Extras limits. Your new fund may take into account benefits you’ve already claimed with your previous fund when applying the annual limits on your new policy.

It’s worth checking this before you switch, particularly if you’ve already made a number of Extras claims during the year.

What happens to my Lifetime Health Cover when I switch health funds?

Switching health funds won’t reset your Lifetime Health Cover (LHC) history.

If you have an LHC loading, it will continue to apply when you transfer to your new fund. If you don’t have a loading, simply switching funds won’t cause one to be added.

The important thing is to maintain your Hospital cover when you switch so you don’t unnecessarily use any of your permitted Days of Absence.

What should I compare before switching health funds?

Price is important, but it shouldn’t be the only thing you compare. A cheaper policy may cover fewer services, pay lower benefits or leave you with higher out-of-pocket costs when you actually need to use it.

When comparing your current cover with another policy, look at things like:

• What Hospital and Extras services are included, restricted or excluded
• The excess you’ll pay if you’re admitted to hospital
• How Extras benefits are calculated and the annual limits that apply
• Any waiting periods that will apply to new or increased benefits
• Whether the fund uses preferred provider networks that affect the benefits you receive
• The fund’s hospital agreements and what they could mean for your out-of-pocket costs
• The service and support you’ll receive from the health fund

It’s also important to compare policies based on your own healthcare needs. A policy with more services or higher limits isn’t necessarily better if you’re paying for cover you’re unlikely to use.

Is it worth switching health funds?

Yes, switching health funds can be worth it if another fund offers cover that better suits your needs. That could mean a lower premium, better benefits, different services or simply a better experience from your health fund.

The important thing is to compare the overall value of the cover, not just the price. Saving money on your premium may not be worthwhile if you’re giving up benefits or services that are important to you.