A changing health landscape

Australians are living longer and have access to some of the world's best healthcare. While that's welcome news, it also means people are using health services more often – and those services are becoming more expensive.

The annual health insurance premium review takes into account these rising health costs, as well as the increase in claims paid out to our members.

Did you know?

We paid $5.1 billion in benefits on behalf of our members in the most recent financial year – the largest amount we've ever paid.

Source: Medibank Annual Report 2015.

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Premium change explained

Each year every health insurer submits an application to the Australian Government

The Australian Government gives final approval of Australian health insurers’ premium changes, which come into effect on 1 April each year. To gain that approval Medibank, like all insurers, needs to show that the changes are the minimum necessary to meet the ongoing payment of benefits to members.

Working to keep increases down

This year we resubmitted our application with a lower average increase than originally planned. It is also lower than last year and the lowest it has been for 4 years. We’re pleased that our recent work across the health sector to drive efficiencies and reduce growing costs is having a positive impact on our members’ premiums.

Your individual premium change

Premium changes vary between individual products and there are lots of factors that contribute to your own change.

These include the general claiming pattern of the product you're on, the state you live in, and whether or not you have an excess. The Australian Government Rebate and Lifetime Health Cover loading could also have an impact.

Health costs are going up

In the 2015 financial year private health insurers’ benefit payouts increased compared to the previous year.

 
Hospital treatments
 
General treatments
 
Payments for prostheses
 
Payments for medical specialists

Despite this rise in benefit payouts, the average premium increase across the industry was just over 6%.

Source: PHIAC/APRA Quarterly Statistics

Our members are going to hospital more

They are also accessing more services each time they’re admitted and the costs of these services are increasing.

Per year since 2010*

3.7
%
Average hospital admissions per member
+
2.3
%
Average benefit we pay per admission
=
6
%
Average hospital benefits paid per member
=
6
%
Average hospital benefits paid per member

*Refers to annual average growth of Medibank (excluding ahm) hospital claims from October 2010 to September 2015.

Did you know that in 2015...

 

1 in 6

Medibank members made a hospital claim
 

5.6

was the average number of nights a Medibank member stayed in hospital per visit
 

1.2m+

Hospital admissions for Medibank members
 

$24,334

was the average cost Medibank paid for a hip replacement
 

27m+

Claims for extra services were made

How we’re transforming health

Medibank is working with others across the health sector to address the issues that are contributing to the rise in healthcare costs.

Take a look

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Staying covered is important

We believe that good health is everything. We want you to have more choice over when and where you’re treated, and to be covered for things like emergency ambulance trips and expensive medical procedures. Having health insurance could even help you pay less tax.



How Medibank gives you more

Here are just a few ways we support your better health.

 

i recover better

Medibank members enjoy the most comprehensive accident coverage of any health fund. With Accident Override* if you have an accident and have to be hospitalised, you're covered.
 

i feel better

Get unlimited emergency ambulance trips for you and anyone on your membership on all Medibank hospital and extras covers. #
 

i smile better

100% back on annual dental check-ups at any Members' Choice dentist.^ It's yet another reason to smile with Medibank.
 

i save better

With a 10% member discount on Medibank Pet and Travel Insurance, save up to $411.48 a year if you hold both policies.
 

i recover better

Medibank members enjoy the most comprehensive accident coverage of any health fund. With Accident Override* if you have an accident and have to be hospitalised, you're covered.

 

i feel better

Get unlimited emergency ambulance trips for you and anyone on your membership on all Medibank hospital and extras covers. #

 

i smile better

100% back on annual dental check-ups at any Members' Choice dentist.^ It's yet another reason to smile with Medibank.

 

i save better

With a 10% member discount on Medibank Pet and Travel Insurance, save up to $411.48 a year if you hold both policies.
View terms and conditions


*Accident Override only available on current marketable Hospital covers.
^ On selected products.
‡ Discount calculated based on combined Medibank member discount on travel insurance and pet insurance for the following products: Comprehensive Single Trip travel insurance for 2 x 60 year-olds, $0 excess, 3 month holiday in USA travel area, a total travel insurance saving of $231.80. Pet Insurance based on Gold Paw product cover, for an 8 year-old Great Dane, $0 excess, a total pet insurance saving of $179.68. Terms, conditions, limits, exclusions and waiting periods apply. Any advice provided is general only, has been prepared without taking into account your objectives, financial situation or needs and may not be right for you. You should obtain and consider the product disclosure statement (PDS) in deciding whether to acquire or continue to hold, Medibank Pet Insurance or Medibank Travel Insurance. Medibank Travel Insurance is issued by Great Lakes Australia (ARBN 127 740 532, ABN 18 964 580 576). Medibank Pet Insurance is issued by the insurer The Hollard Insurance Company Pty Ltd (ACN 090 584 473; AFSL 241436), is promoted by Medibank Private Limited (ACN 080 890 259; AR 286089) and administered by PetSure (Australia) Pty Ltd (ACN 075 949 923; AFSL 420183). For more information, please go to www.medibank.com.au/other-insurance.
# Tasmania and Queensland have State schemes that cover ambulance services for residents of those States.



*Accident Override only available on current marketable Hospital covers.
^ On selected products.
‡ Discount calculated based on combined Medibank member discount on travel insurance and pet insurance for the following products: Comprehensive Single Trip travel insurance for 2 x 60 year-olds, $0 excess, 3 month holiday in USA travel area, a total travel insurance saving of $231.80. Pet Insurance based on Gold Paw product cover, for an 8 year-old Great Dane, $0 excess, a total pet insurance saving of $179.68. Terms, conditions, limits, exclusions and waiting periods apply. Any advice provided is general only, has been prepared without taking into account your objectives, financial situation or needs and may not be right for you. You should obtain and consider the product disclosure statement (PDS) in deciding whether to acquire or continue to hold, Medibank Pet Insurance or Medibank Travel Insurance. Medibank Travel Insurance is issued by Great Lakes Australia (ARBN 127 740 532, ABN 18 964 580 576). Medibank Pet Insurance is issued by the insurer The Hollard Insurance Company Pty Ltd (ACN 090 584 473; AFSL 241436), is promoted by Medibank Private Limited (ACN 080 890 259; AR 286089) and administered by PetSure (Australia) Pty Ltd (ACN 075 949 923; AFSL 420183). For more information, please go to www.medibank.com.au/other-insurance.
# Tasmania and Queensland have State schemes that cover ambulance services for residents of those States.

Premium Review FAQs

Are Medibank's premiums increasing this year?

Every health insurer increases their premiums at this time of year. Medibank received approval from the Australian Government to increase its premiums by an average of 5.64% across all Medibank and ahm health insurance products.

When will the new premium rates come into effect?

1 April 2016.

How does this premium increase compare to previous years?

We’ve worked hard to ensure that the average premium increase is lower than last year (6.49% vs 5.64%). It’s also the lowest it has been for 4 years.

Why are premiums increasing?

Premium increases reflect rising health costs, due to:

  • Increased use and cost of health services
  • New medical technologies
  • Our ageing population
  • An increase in chronic conditions
The Australian Government Rebate tier percentage is also decreasing each year.

What is Medibank doing to address increasing health costs and affordability issues?

We are working hard to address health cost inflation and to tackle private health insurance affordability issues. This work includes:

  • Advocating with government for policy reform that improves affordability and value for our members
  • Investing in primary care programs for people with chronic or complex conditions to prevent unnecessary hospital admissions
  • Partnering with the healthcare sector to reduce waste and inefficiency within the health system
  • Supporting our members and all Australians to be healthy and active

We are pleased that our hard work is starting to pay off and we've been able to share the benefits with our members in the form of our lowest average premium increase in 4 years, as well as offering more competitive products.

To learn more visit www.medibank.com.au/transforminghealth

Why is my premium increase different to the industry average reported in the media?

The industry average is calculated using figures from every health insurer, in every state. It’s not the same as the figure for your individual health cover, which is determined by factors such as:

  • The general claiming pattern of the product you’re on
  • The state you live in
  • Your cover type (e.g. single, couple or family)
  • Any excess you might have

Your premium could also be impacted by the Australian Government Rebate and the Lifetime Health Cover loading.

How are the premium increases worked out and who approves them?

Based on the increasing costs of providing healthcare to our members, Medibank and ahm provided a combined submission with a proposed premium increase to APRA (Australian Prudential Regulation Authority) and the Federal Health Minister for approval. Putting the submission together is always a lengthy process and we continuously look for opportunities to minimise any increase for the benefit of our members. And in late January, we announced we would resubmit our application for a lower increase than originally requested.

Why has my premium gone up more than the rate of inflation?

Health costs and inflation rise at different rates, with health costs increasing at a higher rate. This is due to the increasing use and cost of services, our ageing population, new medical technologies and an increase in chronic conditions.

What is the Australian Government Rebate (AGR) and is it also changing?

The Australian Government Rebate (AGR) on private health insurance is a government contribution to the cost, to make having private health insurance more affordable. The government is decreasing the amount of the AGR from 1 April 2016.

Medibank will calculate the effect of the AGR change and include it in the new premium amount stated in your Premium Review letter, to be sent out in March 2016.

This change to the AGR is a Federal Government initiative and impacts all health insurers across Australia. For further information visit the ATO website

I haven’t used the policy so why is the premium rising?

Private Health Insurance in Australia must meet community rating requirements (this is unique to private health insurance) as set out by the Australian Government , which means everyone has access to the same products at the same price. We can't charge you less for not using your cover or charge you more for using it.

Is the increase higher than it would have been if Medibank hadn’t been privatised, and now has to
pay dividends to shareholders?

Privatisation has had no impact on our premiums. Medibank has paid dividends for years – instead of one shareholder (the Australian Government) we now have many shareholders.

How is Medibank keeping its costs down?

Medibank is working more productively and efficiently to reduce our operating expenses. A key indicator of the cost of operating our business, our management expense ratio (MER), is decreasing each year and we're increasing efficiency by investing in IT and our people to deliver a better experience and more efficient service to our members.

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