One trick that'll save you around 20% on your health insurance

When you first take out a new health insurance policy, you're the youngest you'll ever be, you won't have a claims history, and the cost of medical treatments will probably be lower than it might be in the future.

These are the main reasons health insurance premiums rise each year, with some factors playing a more significant role than others:

You're only going to get older.

A fact of life is that today, you're as young as you'll ever be, and as you get older so does the risk of becoming ill. For example, a third of all cancer diagnoses in the UK affect people aged over 75. But it's not just the higher risk of illness that comes with ageing; so too does the cost of treatment, with complex and more costly interventions being more common among those over 50. Cancer Treatment, for example, can cost hundreds of thousands to treat in the private sector, and it'll be only more expensive if you have comorbidities (other medical conditions) that need to be considered during treatment.

We're also living longer, so health insurers adjust their prices to reflect the needs of an ageing population and that their overall healthcare spending will likely increase.

Staying healthy can help keep increases to a minimum. Some providers reward healthy living, so you can save money by adopting healthy daily habits such as staying active, eating well, and keeping your weight within a healthy range. Policies offering discounts typically ask you to prove how much exercise you do by wearing an activity tracker or participating in events such as Parkrun.

If you claim, it'll likely affect your premiums.

When you claim for treatment on your private health insurance, your insurance company pays the treatment provider for your medical care. Your policy includes financial limits for each type of treatment it covers or specifies how many treatment sessions you can have. Once you've reached that limit, your private treatment will stop, and you'll need to seek NHS treatment or pay for private care yourself if you need more.

Most health insurance policies have a no-claims discount. Unlike car insurance, where you start at the bottom and work your way up, you start close to the maximum discount level of around 65-70%, and as you claim, your discount level reduces. Of course, if you don't claim, you can move up, too, but the maximum is usually around 80%, so there's more to lose than gain.

Alongside your age, claims are one of the biggest influencers of your renewal premiums, and if you lose a lot of your no-claims discount, you may find your premiums go through the roof.

To learn more about this topic, read our guide to how each insurer treats claims and how they affect your no-claims discount.

While NCDs are most commonly used for health insurance, some insurers offer different options, like WPA's "Pooled Risk," which is similar to Freedom's Community Rating, where the claims of all of their members affect your premiums, not your own. Vitality also doesn't offer a no-claims discount and instead calculates renewals by the A+B+C system.

Given the choice in this respect, it's always worth seeking professional advice from a broker so you know what you're signing up for and the pros and cons of the various options.

Treatment costs tend to rise; it's called medical inflation.

Medical inflation (and inflation generally) affects the cost of your health insurance in ways you can't control. We've all seen how economic inflation has increased our living costs recently, and the same rules apply to healthcare providers. When energy costs increase, heating and lighting in a hospital get more expensive, so medical expenses increase as well. While qualified medical professionals can expect to attract good wages, some hospital staff may be on minimum wage. Legislation periodically increases the minimum or living wage employers must pay their staff. Insurers pass all these costs onto their customers through higher premiums.

Medical inflation works similarly but applies to specific medical expenses rather than the overall costs of operating a clinic or hospital. Healthcare costs include the cost of treatments, surgeries, medical procedures, medication, and new technology. Many private healthcare providers pride themselves on investing in the latest technologies and providing their customers access to cutting-edge treatments and drugs licensed in the UK but not currently approved for use in the NHS.

This can be a double-edged sword. While advances in medical technology can improve your chances of recovery or minimise side effects, they'll also increase your health insurance premiums as insurance companies need to cover the costs of new and advanced treatments.

There are several ways you can save money on your health insurance. Before we get to the trick, we'll explain a few options that will help you reduce your health insurance premium by up to 20% in one go.

Firstly, you can increase the excess on your health insurance policy. A health insurance excess works the same as a car insurance excess. You pay for some of your treatment, and your insurance company pays for the rest. It reduces your premium as it cuts the amount your insurer will spend on your treatment. Some policies have an annual excess, while others apply it per treatment. You must ensure the excess is an amount you can afford so it doesn't put you off using your health insurance altogether.

Secondly, you can reduce your policy coverage. You can remove some optional extras on your policy if you're less likely to use them. Alternatively, you can keep your optional extras but reduce the applicable financial limits. For example, you might initially pay for unlimited coverage on some treatments but decide to reduce it to a fixed amount.

It's a good idea to talk to a broker before you adjust your coverage level or increase your excess to ensure you get the right coverage for your needs. A broker can help you shop around and weigh the pros and cons before making changes.

Finally, switching to a guided consultant list can significantly affect your premium.

Switching to a guided consultant list can save you around 20% on your health insurance premiums, sometimes more.

Guided consultant choice is an easy way to significantly reduce your health insurance premiums, but how does it work?

When you buy health insurance, your policy includes a hospital list detailing the hospitals and treatment centres the policy covers. Each health insurance provider has a standard list that's included automatically with every policy.

Most policies also give you a near free choice over which consultant treats you, as long as they offer private treatment at a hospital your policy covers. If there's a consultant you particularly want to see because you know they specialise in the treatment you need or have a good track record, you can ask your health insurer whether your policy covers them and the hospital they work at.

By contrast, when you add guided consultant choice to your policy, you won't get the same choice over who you see. With a guided consultant list, your insurer will give you a shortlist of 3-5 consultants who offer the treatment you need, and you can choose which one you want to see. The consultants on a guided list are typically those who have agreed to the insurer's fee schedule and, therefore, offer predictable treatment costs. They're all still highly qualified but can guarantee a lower treatment price.

Some very experienced consultants also agree to see a few patients each year at a fixed price lower than their usual fee.

Guided consultant choice is an easy way to reduce your premium. It's also ideal if you don't have strong views about the best consultant for your needs or would appreciate some help and guidance.

At MyTribe, we provide general information on health insurance and ways to save money on your premiums. Speaking to a specialist broker is the best way to access health insurance that meets your needs and reduces your premium. Contact us for a comparison quote, and we'll connect you with a regulated, high-quality broker for tailored advice.