Breaking Down the Cost of Your Private Health Cover

Many factors affect the cost of your premium; from Australia’s ever-changing population, medical technology advancements, the delicate balance between the public and private system, to the Australian government and Industry regulators such as APRA and ASIC, the cost of your premium and the rate of its increase every year is decided by these and more factors each year.

Australia’s changing population 

Australia’s population is changing and is fundamentally different from even just 10 years ago. Our population is getting older, we’re living longer, we’re heavier, and we’re visiting hospitals more frequently than ever before, which all builds pressure on the public health system. And unfortunately, that pressure is not about to slow anytime soon. Conditions and illnesses such as diabetes, osteoarthritis, obesity and mental health conditions are also becoming chronic health issues, resulting in more intense treatments and more frequent visits to hospitals by patients.

Advances in medical technology

The worlds medical technology is more advanced than ever before. Doctors and surgeons are now diagnosing more health issues with state-of-the-art equipment and performing operations, that even just a few years ago were deemed impossible. This technology is saving lives every day, but it comes at a price, which ultimately has an affect on the hip pocket of our members.

The balance between the public and private health system

Many are unaware of just how important the balance between the public and private health care system is. Without this vital balance, more and more pressure in placed on the public health system, resulting in long wait times for surgeries, bed shortages and reduced quality for care for those Australians who really rely on the public system.

Due to rising financial pressures, more young Australians than ever before are opting out of private health insurance, which results in rising premiums. As the insured population skews to older Australians who require more treatment, there are fewer younger members to subsidise the costs.

The Australian government understands the importance of keeping this balance, that’s why rebates and tax penalties for Australians over the age of 31 have been introduced to encourage more Australians to purchase private health cover.

Industry regulations 

All Australian health insurance funds are highly regulated by the Australian government and by the industry regulators known as APRA. Any increases to premiums need to be approved by the Commonwealth Minister for Health, who relies on advice from APRA and the Department of Health, to ensure all funds continue to operate in the best interest of their members. This means we must to be able to pay all eligible claims now and into the future.

Health insurers also need to ensure they have a reserve of funds large enough to pay off all medical claims, even at a time of a disaster or a pandemic where large amounts of Australians may require medical attention. The amount in this reserve is heavily monitored by the regulator to ensure we can cover all our members in a time of crisis.

What we recommend if times are tough 

Anyone who has experienced the benefits of private health insurance knows what a relief it is to get quick treatment when you’re in pain; to call on the doctor you know and trust and have a better hospital experience.

If you are doing it tough and are looking for ways to cut costs, we encourage you to contact us. We can look into ways to make your hospital cover more affordable or we can discuss financial hardship options with you if you’re suffering as a result of the pandemic. 

Our advice is to hang on to your private health cover. When you really need it, you’ll be thankful that you did.
We always say to members that we hope they don’t have to use their hospital cover, but we are so glad that a safety net is there for them, if they do find themselves requiring life altering or saving hospital treatment.