Why my health fund hates me, but I love it

My health fund - which I love - hates me. This is because I'm among a presumably small group of Australians who routinely claim back every cent of their premiums as payouts. That's even though those premiums have increased by an average 55 per cent over the past 10 years.

Part of the secret is needing a lot of treatment: to keep pain and injuries at bay, my scoliosis requires a hectic regime of exercise physiology, osteotherapy and myotherapy.

Readers whose medical circumstances also crank their extras usage will be nodding knowingly. And developing a treatment-intensive condition yourself would put you in the same - let's not call it happy, but at least subsidised - position. Without serving waiting periods if cover is already in place.

But I also use a raft of other techniques to ensure I get every cent I pay for. Here they are so you can too.

1. Turn off obstetrics

If you are well and truly done with having kids (be sure) and pick up the phone to cancel this cover, you can slash an instant $500 on average from your premium. (Conversely, make sure you switch this on if you are considering starting a family.) At once you can switch off obstetrics, IVF and any pregnancy health services ??? or at least you can unless your health fund hasn't cynically bundled these conditions with potentially essential services down the track, like joint replacement, psychiatric services and cataracts. However, if they have, read on???

2. Investigate alternative options

The inability to turn off obstetrics might be a trigger to do so ??? but so might this: if you are with a for-profit health fund, the likes of Medibank/ahm, NIB and Bupa, realise they need to share your premiums with either corporate owners or investors. On the other hand, not-for-profit funds (the way the entire industry operated some 30 years ago) have only their policyholders to take care of. Members Own health funds, a grouping of 18 not-for-profits, have returned a higher percentage of their premiums to policyholders over the past five years than the comparative group mentioned previously. Apparently they have higher member satisfaction and retention too. This is all according to analysis of public data that was audited by DBN Actuaries.

3. Swim with the tide

If you have a growing family and are in the swimming lesson phase, decent funds now offer subsidies for these - say, $200 per child per year. Ask. If you don't have such cover, you might find the premium increase well and truly justifies the extra payout, depending on the number of children. It cancels a month's premium for me.

4. Use the free dental

Health funds pretty much across the board have started to offer bi-annual cleans and perhaps annual x-rays. Prevention is better than cure for funds - and for you too. If you instead had to pay for this each year, particularly if you have a couple of kids, you'd almost certainly be looking at a four figure sum.

5. Consider upping your excess

I crunched some numbers for a young family recently and found they could switch from a for-profit fund to a not-for-profit one that, crucially, allowed them to exclude just birth-related services ??? and save $70 a month. What's more, deciding to up the excess on the hospital cover component from $250 to $500 saved them a further $30 a month. In case you missed it, that was a total of $1200 a year. They'll quickly be ahead by more than the excess increase, which applies only to hospital admissions, only once a year and only for the adults on the policy. I am much less keen on the co-payment way to cut costs: forking out, say, $50 for each night in hospital. If you very unfortunately need a protracted stay, this would work out expensive.

You can do your own investigation of your fund alternatives and excess options on the independent and comprehensive government comparison site privatehealth.gov.au. Just remember that for a policy to exempt you from paying the Medicare Levy Surcharge (for uncovered singles with income above $90,000 and families with $180,000), your excess needs to be no higher than a potential yearly total of $500 for singles or $1000 for families, as above.

You've nothing to lose. The Private Health Insurance Act requires insurers to waive any waiting periods you've already served for hospital cover, and most will do the same for extras ??? if it means getting your business.

Nicole Pedersen-McKinnon is a commentator and educator who presents her Smart Money Start, a fun financial literacy incursion, in high schools around Australia. Follow Nicole on Facebook at Nicole Pedersen-McKinnon Money.

This story Why my health fund hates me, but I love it first appeared on The Sydney Morning Herald.