Premium change 2018

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You should’ve heard from us by now about the increase to your membership payments from 1 April. We know – we don’t like it either. 

The sad fact is that health costs are going up much quicker than inflation, which means our costs have to go up too. To give you an idea, in the last financial year we saw benefit payments go up by:       

  • 15.2% for hospital treatments 
  • 5.6% for extras treatments 
  • 32% for payments for prostheses 
  • 18.1% for payments for medical specialists 

Source: Peoplecare 2017 Annual Report

Even with these increases to what we’re paying in benefits, we’ve worked hard to keep our average rate increase this year to 4.19% – lower than last year by 0.9 percentage points.

So why are these costs going up so much? We’re living longer and have some of the best healthcare in the world – which is great! – but it means that more people are using these services more often.

But it’s not just that costs are going up. If you’re claiming the rebate, the amount the Government pays towards private health cover membership changes every year, so you end up covering more of the cost yourself.

The good news is that you’ve chosen a not-for-profit fund, so we only charge what it costs to pay claims and keep us running (not to pay shareholders and overseas investors). In fact, last year 89 cents in every dollar of membership payments were given back to members in benefits. That’s up 1 cent from the year before.

But we get it, it can be a tough balance between looking after your health and looking after your hip pocket. If you’re wondering whether your cover is still right for you, we’re happy to talk you through your options and see if we can save you $$. Just give us a buzz on 1800 808 690 – we’re here to help!

FAQs

Why are my membership payments going up?

In short, we need to be able to pay people’s claims. To do that we need to keep up with medical costs that are growing every year, as well as having more people claiming for these services.

The good news is that we’re not-for-profit, which means we only charge what it costs to pay claims and run our fund. In fact, last year 89 cents in every dollar of membership payments were given back to members in benefits. That’s up 1 cent from last year.

We try to keep our costs down in other ways, too. Like:

  • running as efficiently as possible so we have low administration costs (just 9.77% of the premiums we received in 2016/17, down 0.12 percentage points from 2015/2016)
  • working with the Australian Health Service Alliance (AHSA) to have more bargaining power with hospitals and doctors
  • working with industry bodies to push the Government for changes that make healthcare more affordable for everyone

Not only that, but we also find ways to make money that we can put back into services for our members. At the moment we do that by managing two other health funds and Allianz Global Assistance’s Overseas Visitors Health Cover.

Premium increase vs Government Rebate decrease

If you get a Government Rebate on your cover, the overall increase to the amount you pay for health cover is made up of two things – an increase to our premiums and a decrease in the amount the Government pays towards your cover (which we don’t have any control over).

If you’re wondering about the exact percentage of your rate increase, it’s important to take the Government Rebate into account:

Old rebate (from 1 April 2017)

 

Income threshold

 

Age & Rebate amount
(age of the oldest person on your cover)

Under 65 years

65-69 years

70+ years

Base Tier

Single
$90,000 or less

Family*
$180,000 or less

25.934%

30.256%

34.579%

Tier 1

Single
$90,001 – 105,000

Family*
$180,001 – 210,000

17.289%

21.612%

25.934%

Tier 2

Single
$105,001 – 140,000

Family*
$210,001 – 280,000

8.644%

12.966%

17.289%

Tier 3

Single
$140,001 or more

Family*
$280,001 or more

0%

0%

0%

*If you’re a family with children, the income threshold for each tier is increased by $1,500 for every child after your first. Family includes single parent families.
 

New rebate (from 1 April 2018)

 

Income threshold

 

Age & Rebate amount
(age of the oldest person on your cover)

Under 65 years

65-69 years

70+ years

Base Tier

Single
$90,000 or less

Family*
$180,000 or less

25.415%

29.651%

33.887%

Tier 1

Single
$90,001 – 105,000

Family*
$180,001 – 210,000

16.943%

21.180%

25.415%

Tier 2

Single
$105,001 – 140,000

Family*
$210,001 – 280,000

8.471%

12.707%

16.943%

Tier 3

Single
$140,001 or more

Family*
$280,001 or more

0%

0%

0%

*If you’re a family with children, the income threshold for each tier is increased by $1,500 for every child after your first. Family includes single parent families.
Why is the increase above the inflation rate?

Put simply, healthcare and medical costs are rising faster than inflation. Doctor and Hospital charges are also continuing to rise.

Not only are healthcare costs going up, but our population is getting older and more people are using health services and claiming more.

We know money’s tight for a lot of people and we can promise you that we’re always looking for ways to keep costs as low as possible while still giving you great value and service.

Why is Peoplecare's average increase different to the industry average?

All health funds have different increases and different products have different increases too. Peoplecare’s average increase this year is very close to the industry average. To be able to keep paying claims, we have to base our increase on what our members claim for – not the overall claims across the industry.

While we do everything we can to keep our prices competitive, we want to make sure that we don’t cut costs by taking away any of the benefits or services we offer. Our rate rise is 0.9 percentage points lower than last year, despite strong claims pressure.

And you can rest assured that we don’t just pick any old price when we increase our premiums – all health fund increases have to be checked over and approved by the Government. 

Why is the increase to my membership payments higher than your average increase?

When it comes to rate rise time, we look at every level of cover individually and work out how much we need to increase the cost by to keep people covered. There are a few things we look at when we’re doing this review, including the claiming patterns of members on the cover.

The other thing that comes into play is the adjustment to the Government Rebate that happens every year. The Government is now covering less of the cost of your health cover, and unfortunately that one’s out of our control (and it’s the same for all health funds).

We’ll keep doing everything we can to keep our costs as low as possible while still giving you great quality cover

How do you decide how much you increase membership payments by?

We only ever increase membership payments by what it costs to pay claims and keep our fund running, and any increases we make have to be closely looked at and approved by the Government. This is the same for all health funds.

I haven't used my cover so why is the membership payment increasing?

We can’t charge people less if they don’t use their cover and more if they do. This is a rule made by the Government to make sure that everyone has the same access to private health insurance (it’s called ‘community rating’).

What if I've paid in advance?

If you’ve paid in advance you won’t have to start paying the new amount until your next payment is due. For example, if you’re paid up to 14 November 2018, you’ll start paying the new amount from 15 November 2018.

Why should I keep private hospital cover? I can go to a public hospital for free.

There are plenty of reasons that we think private hospital cover is definitely worth it. Things like:

  • knowing you can have access to the best private hospitals with state-of-the art facilities and won’t have to fork out big bucks for it
  • being able to choose your doctor
  • not having to spend months (even years!) on a public hospital waiting list, by going to a private hospital
  • saving yourself tax (if you’re a high income earner) by not having to pay the Medicare Levy Surcharge
  • avoiding a Lifetime Health Cover loading (by having hospital cover before you turn 31)

When you think about health insurance it’s important to think about more than just the cost – it’s about giving you more choice for your healthcare, less time waiting for the services you need and (most importantly) the peace of mind to know that you’ll be looked after when you need it most.

Why have you increased my premiums but there are no changes to my product?

Health insurance is being used more than ever. The cost of claims is going up, so the price of holding it increases. It’s just like if your kids start downing more milk, you’re going to pay more. 

We’re a not-for-profit, so you only pay what it costs us. At the same time, we’ve reduced what it costs us to run the fund.  

We do our best to keep hospital and doctor expenses as low as possible. To try to reduce your out-of-pocket costs as much as possible, we have Access Gap arrangements with over 30,000 doctors across Australia. This means you will have either no gap (where we pay the full cost of your treatment) or a known gap (where you’ll know your out-of-pocket costs before you have treatment. Read more here.

Need a hand?

Our Peoplecarers are never far away