affordable health cover

Keeping your cover affordable

At Defence Health we’re doing everything we can to keep your cover affordable.

Because we’re not-for-profit, our focus really is on members rather than shareholders. So we look at premiums a little differently to most. We’re looking for every dollar that we can save our members, and every extra benefit we can include to add value to our products. Last year we returned $0.95 in benefits to members for every $1.00 of premium.

The cost of health care and medical treatment continues to rise and all health funds must increase premiums each year to cover the claims they pay.

Under the Community Rating system, private health insurers cannot alter their pricing due to a person’s health status, age or history of claiming. Private health insurance is a discrimination free zone.

However, there are a couple of things that can affect the final premium you pay for your chosen level of cover.

  • Most people are eligible to receive an Australian Government Rebate on private health insurance. This is a sliding scale contribution from the government based on income and age and the rebate percentages are becoming smaller each year.
  • People who arrive at private health insurance later in life – that means in your 30s and beyond – will pay a higher premium due to the government’s Lifetime Health Cover legislation. Under the legislation a loading accumulates at 2% per year after age 30 until you take out private hospital cover. And it stays in place until you’ve had 10 continuous years of cover. You can find out more about the Lifetime Health Cover loading on our website.

Contrary to popular belief, you can’t pick and choose what treatment you’re covered for. And if you could choose what’s in and what’s out, health insurance would become less affordable. For example, removing obstetrics from your cover wouldn’t make it more affordable.

How can you lower your premium?
Including an excess on hospital cover can help to keep your premium down. By agreeing to pay an amount upfront if you go to hospital, you will pay a lower regular premium. At Defence Health the excess only applies to adults who are admitted to hospital or day surgery. Kids will never be charged an excess. And at Defence Health you’ll only pay an excess once per adult, per financial year.

How we keep costs down
The other way we work to keep premiums affordable is to contain the costs that drive them and add value for members. We do this a number of ways.

  • We actively encourage doctors to use Access Gap to minimise out-of-pocket medical expenses. In 2014-15, 92.1% of our members who were hospitalised had no out-of-pockets for their medical treatment.
  • We have agreements with more than 500 hospitals to help us manage the cost of hospital accommodation and hospital services. The agreements also enable us to differentiate our products so we can tailor them to needs of our members.
  • Offering cover with specific inclusions gives young, healthy singles and couples access to affordable cover for basic surgical procedures.
  • Our national dental network provides affordable access to quality dental treatment. Treatment by a network dentist saves members at least 15% off the usual dental fee and in most cases members can access no-gap preventive dental treatment.
  • Preventive dental reduces the likelihood of costly major dental work down the track. And good oral health contributes to better overall health. Learn more about the impact of oral health at Health HQ.
  • We run a tight ship and our management expense is one of the lowest in the industry.
  • We’re investing in Health Programs that will help to reduce the pressure on hospital premiums. Our chronic disease management and risk factor management programs help empower members with serious conditions to improve their health and wellness and stay out of hospital.

We can’t turn the tide on health care costs. But we’ll do everything possible to keep our premium revisions below industry average and maximise value for our members.

Category: Your Insurance

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Article by: Defence Health