Using Your Cover

Why does the cost of health cover go up every year?

We understand this is an important issue every year, so we’ll take you through some of the reasons why premiums are on the rise. We’ll also let you in on some tips to make sure you’re getting the most out of your cover.

Written by Editor Medibank

So what factors affect the cost of healthcare in Australia?

Here are some of the reasons for the rising cost of healthcare in Australia:

  • We’re living longer. Generally, the older we get, the more we rely on the health system to keep us going.
  • More chronic diseases. While we’re living longer, Australians are also being admitted to hospital in increasing numbers. Chronic conditions such as heart disease and diabetes are also on the rise, year by year.
  • New medical technology. New technologies are often expensive to implement and contribute to higher overall costs in the healthcare system.

Put simply, the cost of health cover needs to keep pace with the rising cost of the healthcare system. The government understands this balancing act, which is why their approval is required for each Australian private health insurer’s average increase each year.

What happened last year? It feels like premium increases are happening more often?

2020 was quite the year. To help our members through a time of financial stress brought about by COVID-19, we postponed last year’s April premium increase for six months.

To be clear, October’s premium increase notice wasn’t another increase. It was April’s increase, just delayed six months. And in the end, this six-month breathing space saved Medibank members a total of $120M.

How does Medibank’s increases compare with previous years?

Our average increase in 2021 will be 3.25%. which is Medibank’s lowest in 20 years.

Why do increases differ from member to member?

Not all hospital and extras covers cost the same to begin with, so not all increases will be the same. Several factors can influence the cost of health cover, such as the state in which you live, the kind of cover you have, and any excess you’ve chosen. Your premium could also be impacted by the Australian Government Rebate on private health insurance or the Lifetime Health Cover loading.

I hardly used my cover last year, so why is my premium going up?

Private health insurance isn’t based on individual claiming behaviour like other types of insurance. And while you may have hardly used your cover, others may have used theirs. In fact, all health insurers abide by the Private Health Insurance Community Rating System which ensures everyone has equitable access to private health insurance, irrespective of age, any pre-existing conditions or how much you claim.

What’s Medibank doing to keep health cover costs down?

We’re partnering with hospitals and specialists to develop preventative health programs, such as Better Knee, Better Me to encourage healthier habits that could help prevent more intrusive and costly surgeries in the future.

Our Medibank at Home programs also allows eligible members* to recover and rehabilitate in their own homes, helping to take some pressure off the healthcare system.

Other preventative initiatives that could help reduce health costs over time include:

  • Spending around $25 million a year on member health programs including CareComplete, a program that (where available) supports eligible members living with chronic conditions+.
  • Investing into mental health, including our 24/7 Mental Health Phone Support that is available to members with hospital cover^ for round-the-clock professional advice & support.
  • Encouraging more Australians to Eat, Move and Feel better with activities and advice through our Live Better at Home program.
  • Funding, translating and disseminating health research through the Medibank Better Health Foundation to promote healthy behaviours, inform policy and improve clinical practice.

Tips to help you manage your premiums

Here are several money-saving options that could help make premium payments more manageable.

  • Prepay your premiums for up to a year

By choosing to prepay your full year’s premium, you’re essentially skipping the premium increase altogether and locking in your current premium for up to a full year. You’ll need to prepay before April 2021 to take advantage of this option. Please call us on 132 331 for more information or log in to the My Medibank app.

  • Increase your Hospital excess

By choosing to pay a higher excess upon a hospital admission, you can lower your hospital cover premium payments.

Are you on the right cover?

Perhaps your needs have changed since you last took out your health cover? Contact our team to see if a more suitable cover option may be available for your needs.

Want more information about premium reviews?

We’ve prepared some FAQs on our Premium Review page, including information on the member support services available. And, as always we suggest you regularly review your cover with one of our team.

This past year has been a difficult time, and for many it still is. If you need to talk things through, or you need further assistance with your wellbeing, please reach out to our 24/7 Mental Health Support Phone team^. This service is available to members with hospital cover.



* Must have eligible hospital cover, all relevant waiting periods must have been served and treating doctor must consider it appropriate. Out of pocket expenses may apply. Chemotherapy, palliative and dialysis program not available in all areas.

+ Available in most major metropolitan and regional areas. Not available in the Northern Territory.

^ OSHC members should call the Student Health and Support Line on 1800 887 283.

While we hope you find this information helpful, please note that it is general in nature. It is not health advice, and is not tailored to meet your individual health needs. You should always consult a trusted health professional before making decisions about your health care. While we have prepared the information carefully, we can’t guarantee that it is accurate, complete or up-to-date. And while we may mention goods or services provided by others, we aren’t specifically endorsing them and can’t accept responsibility for them. For these reasons we are unable to accept responsibility for any loss that may be sustained from acting on this information (subject to applicable consumer guarantees).

Written by Editor Medibank

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