Changing your excess: How to reduce the cost of your health insurance premium

At nib, we’re passionate about finding ways to make the price of your health insurance more affordable, which is why we give our Australian Resident Health Insurance members the option to increase their excess limit to $750 for singles and to $1,500 for couples or families. 

So, if you’re with nib, you’ll be able to opt for a higher level of excess in return for a lower premium; however, if you’re with another health fund, this might not apply. 

To help you navigate all things excess, we’ve outlined some of the most frequently asked questions. 

What is a health insurance excess? 

Just like with your car or home insurance, an excess is an amount of money you agree to pay for a hospital stay, before health insurer benefits are payable. Generally speaking, choosing a higher excess means you’ll pay less for your health cover. 

If you select a $750 excess and you make a hospital claim for $2,500 for accommodation and theatre charges (specialist, anesthetist, pathology, radiology are billed separately), you’ll pay the first $750, and your insurer will pay the remaining $1,750. The excess is paid directly to the hospital upfront before you receive treatment and is only payable if you, or someone on your policy, goes to the hospital – it doesn’t apply to Extras cover.

Excess payments are typically made once per person, per calendar year, although this can vary depending on your cover and your health fund. 

If you're an nib member with a family health insurance policy, excess payments are capped at twice the chosen level of excess.  For example, if you choose a $500 excess the maximum excess payment for families would be $1000 annually. However there is no excess for dependant children under 21 years of age.

Excess payments are capped at $750 per calendar year for nib members on a singles policy, and capped at $1500 for all other nib policy types.

To learn more, refer to your Policy Booklet or Fund Rules, or call us.

Do you have questions around your family’s policy? We’ve put together a family guide to health insurance.

If you're looking for ways to reduce your health insurance costs, consider adjusting your excess. By opting for a higher excess, such as moving from $500 to $750, you're effectively transferring some of the risk from your insurer back to you by agreeing to shoulder more of the hospital bill. The result is a lower health insurance premium.  

While a paying higher excess will reduce your premium, a lower excess may mean you’ll pay more for your premiums, but won’t have so much to pay upfront if you’re admitted to hospital.

While there’s no way of predicting whether you’ll need to go to hospital, there are a few factors that can help you determine the right amount of excess you should pay.

You may want to consider a higher excess if you: 

• Are young and healthy 

• Have never been to hospital before 

• Think it’s unlikely that you’ll need to go to hospital 

• Can afford the upfront cost of a higher excess 

You might want to consider a lower excess if you: 

• Have a history of health concerns 

• Have made multiple hospital claims in the past 

• Think that you may need to go to hospital in the future 

• Can’t afford the upfront cost of a higher excess 

You can check your Hospital excess anytime by logging into your nib account online or through the nib App. OVHC members will need to contact us for more information about the excess on your policy.

Your excess limit is selected when you purchase a health insurance policy. If you’re an nib member and you’d like to confirm your excess amount, you can do so by logging into member account or via the nib App.

Yes, you can change your excess at any time by logging into your member account or via the nib App. However, if you choose a lower excess, it's considered a cover upgrade. This means that you’ll have to re-serve waiting periods, and your previous higher excess will still apply during this time. A standard two month waiting period applies for sudden illness and a 12-month waiting period applies for any Pre-Existing Conditions^.

There are a number of different ways you can reduce the cost of your health insurance premium, from reviewing your cover to ensure you’re not paying for things you don’t need, to taking advantage of nib’s direct debit discount.

For other helpful tips on reducing the cost of your cover, check out our guide to saving money on your health insurance premium.