Benefit and premium changes 2017

Premiums are adjusted once a year to account for the rising use and cost of hospital, medical and extras treatment. The adjustment this year includes the savings anticipated from the first stage of reform announced by the Health Minister in November 2016.


Here’s a list of common questions you might have about the changes that take effect from 1 April.

Benefit and premium FAQs

  • Is Defence Health reducing benefits to cut costs?

    No, in fact we’ve made some improvements and introduced a new service for members with hospital cover. You will receive further information about these improvements in your premium communication pack.

  • What are the improvements?
        • Introduction of My Medical Expert which provides a second medical opinion to members with hospital cover. The service is provided by Best Doctors® and connects members with the expert advice of medical specialists from around the world. The service offers:
          • a second opinion through an in-depth medical review by a specialist
          • the opportunity to ask an expert a medical question
          • the ability to check if your recovery is on track.
        • Introduction of a health navigation service for ADF and ex-serving members. Health Nav provides guidance to health resources and service providers in the local area.
      • New physiotherapy benefits for specialist lymphoedema treatment (Premier, Value, and Essentials Extras, as well as ADF Total Package or ADF Essentials Package) and pelvic floor therapy (Premier Extras and ADF Total Package).
          • Lymphoedema occurs when there’s too much fluid in one area of the body which causes swelling. It can be caused by some cancer treatments, removal of lymph nodes and the progression of some diseases. Around 300,000 Australians will experience lymphoedema at any given time.
          • Pelvic floor physiotherapy can help people with urinary control issues, bowel issues and pre and post-surgery for some conditions.
  • Why are premiums going up when there are few improvements?

    It’s a fact that costs increase from year to year – and it’s vital for the protection of all members’ funds that we cover those costs through premium revenue.

    This year we have gone to even greater lengths to tackle the affordability pressures on members. We’ve deliberately kept the outlay in product improvements minimal in order to keep premiums as low as possible, and maintain the peace-of-mind you purchase insurance for.

  • How can you say Defence Health provides better value?
      • Lower out-of-pocket expenses - in the last financial year 90.6% of our members had no out-of-pocket expense for their medical treatment. That’s better cover than the industry average of 85.4%.
      • Being a Members Own Health Fund means there’s more for members. In the last financial year we returned around $0.95 in benefits to members for every $1.00 we received in premiums (compared with the industry average of $0.86). And our management expense (staff and business costs) continues to be one of the lowest in the industry – just 6.7% of premium revenue (compared with the industry average of 8.5%).
      • We do not have shareholders and therefore do not pay dividends. Instead, we reinvest funds in health programs to improve the health and wellbeing of our members. For example, our dental network, MyBaby Support Program, expansion of health management programs, My Medical Expert, introduction of flexi-limits and a premium reduction for members with a DVA Gold or White card.
      • Our focus is always to keep our premiums as low as possible and this year we priced our products to include anticipated savings from the first stage of prostheses reform.
  • Why has my hospital premium increased again?

    The amount we pay in hospital benefits is increasing because of the rising cost of health care and medical technology in hospitals. Also, there’s a greater frequency and number of people going to hospital.

    In the 12 months to September 2016, hospital benefits paid increased by 9.5% and medical benefits increased by 5.4%.

  • Why has my extras premium increased?

    The extras benefits we pay for treatment like dental, physio, chiro and optical are increasing also. In the 12 months to September 2016, the benefits paid per Defence Health extras membership increased by 8.6%. This is because more people are claiming and many people are claiming more frequently. It would be unsustainable if we did not adjust our extras premiums.

  • What’s driving the increase in health costs?

    The agreements we have with private hospitals help to keep hospital accommodation and theatre fees reasonably stable. However, the rise in public hospitals asking patients to use their private health insurance adds to our hospital benefit outlays. This practice saves money for the government, but shifts the cost to private insurers without providing any additional value for the patient.

    Increased utilisation of hospitals also adds to our hospital benefit outlays. Utilisation is increasing due to the ageing population and an increase in chronic disease.

    Improvements in medical technology and our higher expectations as health consumers also contribute to rising costs.

    The cost of prostheses is highly inflated in the private sector. In November 2016, the government announced the first stage of price reforms to the prostheses list. This means a price reduction of 10% for cardiac devices and intraocular lenses, and 7.5% reduction for hip and knee prostheses.

    While the reductions are not as significant or far reaching as we had hoped, the anticipated savings have been factored into the latest premium adjustment.

  • Why is my increase higher than the published average increase?

    An average is measured across all levels of cover, types of policy and premiums from around the country. It does not include the Rebate or a Lifetime Health Cover loading, which if applicable, will impact the final amount you pay. Each year, the government reduction in the rate of the rebate on private health insurance adds to the impact of the premium adjustment.

  • How does Defence Health’s increase compare with other funds?

    Historically we’ve had significantly lower premium adjustments than the bigger for-profit funds. Plus, our base premium is very often lower than a comparable product offered by another fund. Your product continues to represent excellent value and provides competitive benefits.



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    In the last five years, the cost of hospital, medical and prosthesis benefit payments per Defence Health membership have increased by more than 44.30%, whereas our average private health premium has increased by only 28.80% in the same timeframe.

  • Why is the Defence Health average increase higher than the industry average this year?

    Defence Health continues to manage the fund sustainably, while reinvesting in meaningful benefits for members. The increase is necessary to ensure we have adequate capital and income to pay for what we expect to fund in benefits to members over the next 12 months.

    Although slightly higher than the industry average increase, we continue to offer, in many cases, a lower premium in a like-for-like comparison.

  • How does the government freeze on the Medicare Benefit Schedule affect me?

    The freeze on the MBS saves money for the government but contributes to higher health care costs for consumers.

    Despite the government freezing the amount it pays doctors through Medicare, Defence Health is continuing to index our contribution for doctors who use our Access Gap cover. This encourages doctors to use Access Gap when treating our members in hospital – and leaves you with no-gap or a small known-gap to pay. Not all funds are doing it, but it’s another action we’ve taken to maintain the value of your cover.

  • Can I pay my premium in advance?

    Yes. Any amount you pay before 1 April 2017 will be applied at the old premium rate. However, we can only accept payments up to 31/03/2018.

  • I don’t claim much. Why should I pay more?

    All funds must charge their members the same premium for the same level of cover. We do not discriminate or offer preferential pricing based on your health, age or history of claiming. Like any insurance, your premium provides you with peace of mind that you will have the cover you need, perhaps when you least expect it.  

  • I’m a concession card holder and eligible for an ambulance levy exemption. Why is my premium increasing?

    Your ambulance levy exemption helps to reduce unnecessary costs to the fund. However, the rising cost of health care outstrips the savings we make through this levy exemption.

  • Why can’t I remove pregnancy from my cover to reduce my premium?

    Excluding certain treatment (such as obstetric care and IVF) from your product would not actually result in a lower premium. We realise that not everyone will require pregnancy cover, and thankfully, not every member will require cover for open heart surgery either.

    Including a range of treatments in our levels of cover ensures we do not discriminate on the basis of gender, age or specific health conditions.

  • When does the increase take effect?

    Your premiums will change from the first premium payment on or after 1 April 2017. Any payments you make 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 and process it before then to ensure it is processed under the old rates.

  • How is the rebate calculated?

    On 1 April each year, the government adjusts the Private Health Insurance Rebate by a factor linked to the Consumer Price Index (CPI). As premiums tend to rise more than the CPI (because of higher health care costs and increasing use of healthcare) the percentage of rebate you receive will decrease each year.

  • Can I elect a different tier of rebate?

    Yes. The level of rebate you are eligible for depends on your age and annual ‘income for surcharge purposes’. The government has frozen the income thresholds until June 2018 and this could force you into a higher income tier and reduce your rebate entitlement.

    You can change your rebate tier according to your income through your Online Member Services account on our website. Or you can call us and we’ll make the change for you.

  • My monthly payment on 15 March was not processed. Can I pay the same amount now (post 1 April)?

    If you miss a payment in March, the amount you will need to pay to cover the same period of cover will be slightly higher in April.

  • Should I shop around for a cheaper premium?

    We recommend a regular review of your cover to ensure you’re on the right level of cover for your age and stage of life. We’re happy to help you with a review of your current cover and needs. 

    The comparison tool at is useful if you’d like to do some research yourself – but the new premiums for all funds won’t be updated until 1 April. When comparing different cover, the Ombudsman advises consumers to give priority to good quality hospital cover. And the Ombudsman also recommends that you keep in mind your Lifetime Health Cover status and the Medicare Levy Surcharge when making decisions about your hospital cover.

Health Nav FAQs

  • What is Health Nav?

    Health Nav is a new service for our ADF and ex-serving members. It connects members with the doctors, health information and health resources they may need, that exist in their local area.

  • Why is Health Nav just for ADF and ex-serving ADF members?

    Our serving and ex-serving families face unique challenges in accessing health information due to the frequency with which they are posted around the country. Health Nav aims to:

      • make it easier to navigate the health system (Medicare, DVA and government resources)
      • connect newly posted families with local doctors and service providers
      • put you in touch with maternity support in the local area
      • support transitioning families and identify available resources.

My Medical Expert FAQs

  • Who can use My Medical Expert?

    Any Defence Health member with any level of hospital cover.

  • Why would I use My Medical Expert?

    My Medical Expert provides you with independent, specialist medical information. You might want to use the service if you:

      • want more detailed information about your condition
      • would like some help to make a decision about recommended treatment
      • want to check why your symptoms are not improving or your recovery is not progressing as expected
      • want to confirm if surgery is the best option
      • would like a second opinion.
  • Who will have access to my medical information?

    Best Doctors is a separate international organisation that will deal directly with you. No-one at Defence Health will have access to your confidential medical information.

  • What if my doctor disagrees with the second medical opinion provided through My Medical Expert?

    The advice does not replace your relationship with your doctor. In Australia, the clinical review process undertaken by Best Doctors® has led to a change of diagnosis in 10% of cases, and a suggested change of treatment in 26% (on average). Best Doctors does not provide medical treatment – the service just gives you valuable information for you to discuss with your doctor.

  • How does My Medical Expert work?

    My Medical Expert utilises the Best Doctors database of more than 53,000 leading medical specialists from around the world. They are recognised as the best in their field and are dedicated to providing members with expert medical advice and support.

    For an in-depth diagnostic review of your condition, Best Doctors will collect your medical records and retest pathology if required. The most qualified expert will be appointed to review your case. The findings will then be delivered to you in a report, with someone from the Best Doctors medical team calling you to discuss the report.

    An in-depth review will take around 15–20 days from the time of collecting your medical records.

  • Do I need to visit the specialist who reviews my condition?

    No, only your medical records will be examined.

  • What medical conditions are covered by My Medical Expert?

    You can use My Medical Expert for advice or clinical review of:

      • diseases of the nervous system
      • eye disease
      • diseases of the ear
      • respiratory system conditions
      • the metabolic and endocrine system
      • digestive disorders
      • musculoskeletal conditions
      • urological conditions
      • cancer
      • immunological diseases
      • blood diseases
      • gynaecological conditions
      • circulatory system
      • skin diseases
      • …and more.

    My Medical Expert cannot provide advice on mental health or dental treatment, or treatment in the case of an emergency.

  • Will my health insurance cover me for the treatment recommended through My Medical Expert?

    Not necessarily. The Best Doctors report could recommend treatment that is not available in Australia, or not included under your level of hospital cover. Please contact Defence Health to confirm what treatment and conditions you are covered for.

  • How independent is Best Doctors?

    Best Doctors was established in 1989 by a group of doctors from the Harvard Medical School. It has grown to a database of more than 53,000 doctors covering 450 specialist areas of medicine. Many of them practice in medical centres of excellence around the world. Best Doctors is not paid by the specialists – and the specialists are not paid by Best Doctors. The objective is to ensure that patients get the best medical information available so they can make the best medical decisions.

Benefit and premium changes 2017 flyers