April 2014 premium changes FAQs

We have put together a selection of frequently asked questions about April 2014 premium changes. If you have any other questions please give us a call on 1800 335 425.

 

  • 1. Why has my hospital premium increased again?
    • The amount we pay in benefits for hospitalisation is increasing. This reflects the rising cost of health care and medical technology in hospitals.
    • Also because of the greater frequency and number of people going to hospital.
  • 2. Why is my increase more than the inflation rate?

    The combined impact of the rising cost of health care and the greater number of claims we’ve received means the real increase in hospital and general treatment is much higher than the Consumer Price Index.

    Defence Health has absorbed some of the increase in costs.

    Our premiums have increased by 5.34% on average, compared with the industry weighted average of 6.20%.

  • 3. I have Extras only. Why has my premium increased?

    We have experienced a significant rise in the number of extras claims.

  • 4. When does the increase take effect?

    Premiums will change from 1 April 2014. Any payments made before this date will be treated under the old premium structure.

    If you have a payment due before 31 March, it is important that we receive it before then to ensure it is processed under the old rates.

  • 5. Can I pay my premium in advance?

    Yes. Any amount you pay before 1 April 2014 will be applied at the old premium rate. Defence Health can only accept payments up to 12 months in advance.

  • 6. Is Defence Health reducing benefits to cut costs?

    No, there is no reduction in our level of cover. We continue to provide 100% cover in an agreement hospital. And there is no lowering of benefits for either Standard or Top Extras members.

  • 7. Are there any improvements?

    Yes, Standard and Top Extras members will receive much better optical benefits through our new Optical Network. The Optical Network providers are Specsavers and VSP Vision Care (a group of more than 500 independent optometrists).

     

  • 8. What's happening to the rebate?

    The Australian Government has changed the way the rebate is applied to health insurance premiums.

    From 1 April 2014, the rebate will be indexed annually using a calculation which represents the difference between the Consumer Price Index and the industry weighted average premium increase.

    As a result, the percentage of rebate as a proportion of your premium is likely to diminish over time.

  • 9. Is the value of the rebate decreasing?

    The dollar value of the Government’s contribution to your premium will still increase each year.

  • 10. Is the percentage of my rebate decreasing?

    The Government refers to the new calculation as an adjustment to the rebate. It’s a complex calculation, but as the rebate is now linked to the CPI rather than your actual premium increase, the percentage of rebate as a proportion of your total premium is likely to decrease each year.

  • 11. Why has the Government adjusted the rebate?

    The Government wants to limit the increasing cost of the rebate on the federal health budget. The growth in the rebate has been the fastest growing component of federal health expenditure. By linking the rebate to the rate of inflation – which is typically lower than the real cost of health care – it will make savings for the budget.

  • 12. Can I still elect a different tier of rebate?

    Yes. The level of rebate you are eligible to receive will continue to be assessed against your age and annual ‘income for surcharge purposes’. The 2013-14 income thresholds can be seen below.

    2013-2014 Income thresholds for private health insurance rebates

  • 13. When does the new rebate calculation take effect?

    Any payments made on or after 1 April 2014 will have the new indexed rebate applied, regardless of the cover period of the payment.

  • 14. My monthly payment on 15 March was rejected. Can I pay the same amount now (post 1 April)?

    The amount you will need to pay to cover the same period of time will be slightly higher.

    The indexed rebate will apply to the entire payment made on or after 1 April. And the premium calculation for the period from 1 April will be at the new rate.