How your premiums are calculated

The AGR is a rebate provided by the Australian Government to help Australians reduce the cost of their health insurance premiums. If you’ve applied for AGR and are eligible, we apply it as a reduction to your premiums.   

If you’re a new member, we allow you time to apply for the AGR: 10 days if you’re paying fortnightly, and 21 days if you’re paying monthly or more. If we don’t receive your AGR application within this time, you’ll charged a higher premium until we do. There will also be a retrospective adjustment to the premiums you’ve already paid to cover that temporary higher premium.

AGR is based on age and income, which will determine how much of a premium reduction you receive. The percentage of AGR you’re entitled to changes each year, which will in turn affect your premium.

If you make any change to the AGR, this won’t be reflected in My Medibank until the next premium payment – they can’t be backdated. If you have been paying the incorrect premium and receiving a higher or lower premium reduction than you’re entitled to, it will automatically be adjusted in your next tax return. 

The LHC is an Australian Government scheme designed to encourage people to take out hospital cover by the time they are 31. It means that you take out hospital cover earlier in life and keep it, you will pay lower premiums than someone who joins when they are older. We allow you 8 weeks from the date you join to send us your Clearance Certificate (also known as a Transfer Certificate). If we don’t receive the certificate within this time, you’ll charged a higher premium until we do. There will also be a retrospective adjustment to the premiums you’ve already paid to cover that temporary higher premium.

Health insurers now have the option to offer aged-based discounts on hospital insurance for younger Australians (aged between 18 and 29) to help make health insurance more affordable. Following 1 April 2019, Medibank now include the Young Adult Discount on many of our hospital covers. 

The discount you receive depends on your age when you first take out an eligible hospital cover and ranges from 10% (if you take out cover before the age of 26) to 2% (if you take out cover at the age of 29).

The discount is ongoing, which means if you keep your eligible hospital cover, your discount remains until you turn 41. From then, the discount will reduce by 2% per year until it reaches zero.

The same insurance product may cost different amounts in other states. This can be due to the number of contracted providers in that state, the number of services available (hospitals, for example), and so on. This can affect how your premium is calculated.

You can choose to pay a higher excess when you go into hospital to lower your premiums.

The number of people included on your cover also impacts your premium. Adding or removing a member may mean the category of your membership needs to change. These are the membership categories we offer:

• Single membership – includes the Policy holder only.
• Couple membership – includes the Policy holder and their partner.
• Single parent family membership – includes the Policy holder and any of their child dependants and/or student dependants.
• Family membership – includes the Policy holder, their partner and any of their child dependants and/or student dependants.

On some of our covers, we can also extend the cover to include an adult dependant or dependents for an additional cost

If you’re paying monthly via direct debit and your policy has a start date of the 29th, 30th, or 31st of the month, the due date will be the 28th of the month by default. (This is because not all months include a 29th, 30th, or 31st.) Because of this, your first direct debit payment/s will be calculated on a pro rata basis and will usually be less or more than your standard monthly premium.

When your scheduled direct debit payments don’t align to your policy start date, your first payment/s may be less or more than your standard monthly premium. This is because premiums are calculated on when you joined Medibank, and we make pro rata adjustments to account for this.

There may be variations in payments when you join during a “first month free” or “first six weeks free” offer. Because all premiums are paid a month in advance, this offer applies, strictly speaking, to the second month or six weeks of membership. The pro rata deduction (which may also be affected by the two factors above) may cause a small direct debit, or cause the policy to temporarily fall into arrears if the payment amount is under $5.