The health funds freezing premium increases today

author-avatar By on April 01, 2020
The health funds freezing premium increases today

Photo by Aditya Romansa on Unsplash

A large number of health funds have announced they are delaying premium increases until later in the year.

Under normal circumstances, health insurance providers increase their premiums every year on April to adjust for rising healthcare costs, among other factors. 

According to the Department of Health, the average increase across all funds this time around was supposed to be 2.92%, the lowest since 2001 when premiums actually decreased on average. 

Insurer
Average increase (%)
2014 2015 2016 2017 2018 2019 2020
Biggest increase 2.98% 3.98% 3.76% 2.98% 2.28% 1.64% 1.98%
Smallest increase 7.99% 7.92% 8.95% 8.53% 8.90% 5.91% 5.63%
INDUSTRY WEIGHTED AVERAGE 6.20% 6.18% 5.59% 4.84% 3.95% 3.25% 2.92%

Source: Department of Health

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This year's 2.92% rise would result in an extra $127 in costs for the average family in a single year, but that was before COVID-19 struck. 

In response to the global pandemic, many health funds have announced a string of relief measures for customers affected by the virus, which crucially includes a freeze on premium increases until at least 1 October, six months from now. 

One of the first major funds to commit to dumping premium increases was HBF on 26 March, which was set to implement a relatively minor 1.98% rise. 

HBF’s CEO John Van Der Wielen said the move was due to many of its one million members finding themselves impacted by difficult financial circumstances.

“These are extraordinary times and now more than ever access to the best healthcare is more important than ever,” he said.

Consumer Advocate CHOICE called on more health funds to do the same, with CEO Alan Kirkland saying private health insurers can help a little bit financially by not passing on their premium increases.

“If people can’t use the normal services that would allow them to claim on their private health insurance, then insurers’ costs will be going down," Mr Kirkland said. 

"There is no way they can justify increasing premiums in this context. Health funds should scrap their April 1 premium increases."

Sure enough, on 30 March, Australia's four biggest health insurers - Medibank, Bupa, HCF and NIB - all announced premium freezes.

Other smaller providers meanwhile had already made such announcements, like Peoplecare Health, which announced a premium freeze as far back as 16 March. 

With this measure potentially allowing Australian households and families to comfortably save over a hundred dollars year, Savings.com.au has compiled a list of the health funds freezing premiums, as well as other relief measures they're taking. 

If your health fund isn't featured here, then get in contact with the fund to see what options you have for financial relief. 

HBF premium freezes 

HBF was the first health fund to commit to no premium increases, dumping its planned 1.98% increase until further notice (more details are set to be announced soon, so continue to check HBF's media page here). 

“We want to do everything we can to keep health insurance affordable for our members,"  Mr Van Der Wielen said. 

Bupa premium freezes 

Bupa announced a $50 million assistance package for those suffering hardship on 26 March, confirming all customers with a hospital policy would be covered for COVID-19 related claims, irrespective of the terms of their policy.

Two days later, it confirmed it would not be increasing premiums for any customers for six months.

“Australians are hurting, and we all need to play our part”, Bupa Australia & New Zealand Chief Executive Officer Hisham El-Ansary said. 

“Over the past month, we’ve sent more than 2.2 million emails or letters advising of premium increases due to take effect on 1 April. Those increases will now not apply for another six months. 

"Customers don’t need to take any action - we will put the changes through our systems and update customer accounts accordingly."

The planned increase for Bupa premiums was above the average of 3.26%. 

HCF premium freezes

Not-for-profit HCF announced a six-month delay on premium increases, and also said it would allow customers who become "involuntarily unemployed through no fault of their own" to receive cover for their existing premiums for the same time-frame. 

“We are looking to do whatever we can to support our members doing it tough during this fast changing and unpredictable COVID-19 pandemic” HCF CEO Sheena Jack said.

“As a not for profit, we exist purely to support our members. They are, and will always be, our top priority."

Medibank & ahm premium freezes 

Medibank and ahm announced on 26 March a $50 million relief package, which included paying benefits towards chest, heart, lung and kidney hospital admissions related to the coronavirus, regardless of the level of cover customers have. 

Since then, Medibank and ahm have announced the planned 3.27% increase will be scrapped for six months until 1 October. 

Medibank CEO Craig Drummond said the coronavirus is presenting us with the most significant health and economic challenge this country has seen in 100 years.

“That calls for extraordinary measures from all of us. Premiums for Medibank and ahm customers will be automatically adjusted over the coming weeks, and regular updates will be posted on our websites," he said. 

“We hope these initiatives go some way to relieve the understandable stress, fear and anxiety our customers are experiencing, and consistent with what we said earlier this week, any further benefit from lower claims, including from the cancellation of non-urgent elective surgery will be returned to customers."

nib premium freezes 

nib - one of Australia's only ASX-listed health insurers, is delaying its planned premium increases of 2.9% to 1 October. 

nib Managing Director, Mark Fitzgibbon said the decision to postpone the planned 1 April 2020 increase was the responsible thing to do.

“It's a very significant measure and the reality is we aren’t yet seeing any material savings as a consequence of the government order to temporarily suspend non-urgent elective surgery," Mr Fitzgibbon said.

nib announced last Friday it would be expanding coverage for all customers affected by COVID-19, and said it will be notifying members that these changes apply automatically. 

Other premium freezes

Below is a list of other health funds that have announced a freeze on premium increases in response to COVID-19. 

While most of these freezes will apply automatically, it's still worth contacting your insurer to make sure you're getting a freeze, and to ask what other assistance is available for your circumstances. 

ACA premium freezes

  • Planned increase: 3.94%
  • Freezing premiums: Yes
  • Until when: Not publicly disclosed - contact your fund for more information

Australian Unity premium freezes

  • Planned increase: 2.79%
  • Freezing premiums: Yes
  • Until when: At least 1 October 2020
  • Other relief measures: All private health insurance policyholders who are Australian residents, irrespective of their level of hospital cover, will be covered for chest, heart, lung and kidney hospital admissions related to COVID-19. 

CBHS premium freezes

  • Planned increase: 3.91%
  • Freezing premiums: Yes
  • Until when: 30 September 2020
  • Other relief measuresMembers experiencing financial difficulties because of COVID-19 will be able to:

    • Access up to six months free cover on a Hospital or a combined Hospital and Extras product;
    • Suspend cover following this up to six months free cover period for 3-24 months.

CUA premium freezes

  • Planned increase: 3.99%
  • Freezing premiums: Yes
  • Until when: 1 October 2020
  • Other relief measures:
  •  
    • CUA Health policy-holders experiencing financial difficulty or a loss of income as a result of COVID-19 can suspend their policy and premium payments for three months
    • CUA Health will cover members for all in-hospital COVID-19 treatment irrespective of their level of hospital cover, provided they have held the CUA Health hospital policy for at least two months.

Defence Health premium freezes

  • Planned increase: 3.49%
  • Freezing premiums: Yes
  • Until when: Until further notice for all members 
  • Other relief measures: All members on hospital policies will be covered for any COVID-19 related treatment, regardless of their level of cover.

Doctors' Health Fund premium freezes

  • Planned increase: 3.29%
  • Freezing premiums: Yes
  • Until when: 1 October 2020
  • Other relief measures: All members with a hospital policy will be fully covered if admitted to hospital as a private patient due to COVID-19 (waiting periods apply for new members).

GMHBA premium freezes

  • Planned increase: 3.34%
  • Freezing premiums: Yes
  • Until when: At least 6 months
  • Other relief measures
    1. Hardship suspensions for up to 12 months with no minimum reactivation period
    2. All members with hospital cover will be covered for COVID-19 related hospitalisations.
    3. Introduction of ancillary benefits for telehealth physiotherapy and psychology services

HIF premium freezes

  • Planned increase: 5.58%
  • Freezing premiums: Yes
  • Until when: 1 October 2020
  • Other relief measuresMembers who can’t afford to pay their premiums due to the financial consequences resulting from COVID-19 can suspend their policy for between two and 12 months

Health Partners premium freezes

  • Planned increase: 2.77%
  • Freezing premiums: Yes
  • Until when: At least six months
  • Other relief measures: All COVID-19 related claims will be covered on all Health Partners Hospital cover irrespective of the terms of that policy, at no extra cost, and emergency dental & optical is also available 

Latrobe Health Services premium freezes

  • Planned increase: 3.49%
  • Freezing premiums: Yes
  • Until when: 1 October 2020
  • Other relief measures:
    • All Coronavirus-related hospital admissions for chest, heart, lung and kidney will be included in members’ hospital covers until 1 October 2020, irrespective of level of cover.
    • Waiving excesses and waiting periods for Coronavirus-related hospital admissions.

Mildura Health premium freezes

myOwn premium freezes

  • Planned increase: 5.63%
  • Freezing premiums: Yes
  • Until when: At least 6 months
  • Other relief measures:
  • Planned increase: 3.49%
  • Freezing premiums: Yes
  • Until when: 1 October 2020
  • Other relief measures
    • Reducing minimum period for suspension of membership due to financial hardship to one month
    • All members with hospital cover will be covered for hospital admission related to COVID-19 (where it is not included in your current level of cover, Navy Health will cover via ex-gratia payments).

Nurses and Midwives Health premium freezes

  • Planned increase: 3.74%
  • Freezing premiums: Yes
  • Until when: 1 October 2020
  • Other relief measures:
    • All members with hospital cover will be covered for COVID-19 hospital admissions regardless of the level of cover.
    • Members experiencing financial hardship due to COVID-19 can apply to suspend their cover.

Peoplecare Health premium freezes

  • Planned increase: 3.48%
  • Freezing premiums: Yes
  • Until when1 October 2020
  • Other relief measures:
    • If you have any level of hospital cover with us, it includes COVID-19 treatment, as long as you joined before 31 March 2020.
    • If you have extras cover, you can now claim for video & phone consults with psychologists, physio, occupational therapy, speech therapy and dietetics

Phoenix Health premium freezes

  • Planned increase: 3.10%
  • Freezing premiums: Yes
  • Until when: Minimum of six months
  • Other relief measures: If you're hospitalised for treatment related to COVID-19 you will be covered, regardless of your level of Phoenix Health hospital cover at no extra cost.

Queensland Teachers' Union (TUH) premium freezes

  • Planned increase: 3.56%
  • Freezing premiums: Yes
  • Until when: 1 October 2020
  • Other relief measures
    • All TUH hospital covers will now include cover for private patient hospital admissions due to illnesses attributable to a positive diagnosis of COVID-19
    • Expanded hardship options 

St Lukes's Health premium freezes

  • Planned increase: 2.90%
  • Freezing premiums: Yes
  • Until when: Up to 1 October 2020
  • Other relief measures:

Teachers Health premium freezes

  • Planned increase: 3.24%
  • Freezing premiums: Yes
  • Until when: 1 October 2020
  • Other relief measures:
    • All members with hospital cover will be covered for COVID-19 hospital admissions regardless of the level of cover.
    • Members experiencing financial hardship due to COVID-19 can apply to suspend their cover.

Transport Health premium freezes

Westfund premium freezes

  • Planned increase: 4.32%
  • Freezing premiums: Yes
  • Until when: Until further notice 
  • Other relief measuresAll members with hospital cover will be covered for COVID-19 hospital admissions regardless of the level of cover.

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William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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