Written

For

The

Australian

-

Study

the

options

when

your

health

insurance

bills

get

out

of

control

Here's a number that should make you sit up: only 18 per cent of Australians with private health insurance actually use it regularly. The rest of us are pouring $5,000 to $7,000 a year into policies we barely touch — and now premiums are rising again.

The government says the "average" increase from April 1 is 3.7 per cent. That headline is misleading. Some funds are pushing premiums up by as much as 9.5 per cent, and with cost-of-living pressures already biting, this is the wake-up call to finally get your cover sorted.

Let me break it down. There are two types of cover — hospital and extras — and most people get both wrong. High-income earners (over $97,001 single or $194,001 family) should absolutely hold a cheap $1,000–$2,000 hospital policy, even if they never plan to use it. Why? Because it dodges the Medicare levy surcharge of up to 3.5 per cent, which dwarfs the premium. And if you're near 31, get in before July 1 following your birthday or you'll cop a 2 per cent loading for every year you delay, for a decade.

Extras is where I see the most waste. My advice: write down the top five things that matter to you — obstetrics for young families, dental and optical for retirees — then use the government's comparison tool at privatehealth.gov.au. You'll shortlist five to ten policies. Then comes the unglamorous but essential part: read the fine print. Some funds reimburse 30c in the dollar, others 100 per cent. Some lump physio, chiro and acupuncture into one annual cap; others treat them separately. Lifetime caps on orthodontics can catch you out too.

Once you're on the right policy, use it. Stick the benefits summary on the fridge. Schedule your massages, dental checks and optical visits across the year to actually claim what you're paying for.

And one last tip — act before April 1 and several insurers will let you pre-pay at the old rate for up to 18 months.