- Benefit and premium changes 2018
Changes from April 2018
As a not-for-profit health fund, our aim is to maximise value for members. Every year we must adjust premiums to meet the rising costs in the health sector. This year we’ve also made some product changes to help keep the premium adjustment as low as possible for all members.
Details on how the changes relate to your policy are in a letter that we will post to you shortly. Here are some of the common questions you might have about the changes.
When will the increase be applied?
Your new premium will apply from 1 April 2018.
Why are Defence Health premiums increasing by more than other funds?
The rate of our increase is higher than the industry average this year because we have experienced a significant increase in claims in the last 12 months. This is because more people are claiming and many people are claiming more often. We must act responsibly for the long-term sustainability of the fund and protection of all members.
Over the nine years to 2018, Defence Health's compound increase has been 6.02% lower than the industry average.
Why is my premium going up but benefits are not?
We need to be responsible in our financial management, and to do this we can’t continuously adjust premiums at the lowest end of the scale or enhance benefits at the rate we have in the past. Defence Health products remain great competitive and great value.
Why have you increased my excess from 1 July?
Increasing your excess keeps downward pressure on your hospital premium. If we didn’t take this step, the increase in premium would be higher. The excess is only payable if you go to hospital.
Why are dental benefits decreasing?
We understand how valuable your dental benefits are to you. But with a significant increase in the rate of dental claims, we’ve had to adjust the benefit payable. Remember though, at one of our dental network dentists, you’ll save at least 15% off the usual dental fee – and that’s before your Defence Health benefit is paid.
Why have some medical devices been removed from Value Extras?
To align the benefit schedule of Value Extras with its competitive premium, we’ve had to remove some high-cost appliance benefits from the product. Members who regularly claim these items can access benefits under our Premier Extras cover and can upgrade before 30 June with their waiting periods for appliances recognised. Waiting period for higher benefits and new services not previously covered will still apply.
What if I elect to be a private patient in a public hospital?
We will continue to pay the minimum shared room benefit if you choose to use your private hospital cover in a public hospital. We will top-up the benefit by $80 per day if the hospital accommodates you in a private room. You could have an out-of-pocket expense if the hospital charges more than this for a private room.
Why is my increase more than the cost of inflation?
Premium increases reflect the rising cost of health care overall – increased doctor charges, increasing health related expenses, medical equipment, technology – and how often members claim.
Health inflation is roughly double the rate of the consumer price index. And yet the Private Health Insurance Rebate, that is the amount the Government provides to help cover some of the cost of health insurance premiums, is adjusted according to the CPI. This means that the rebate is reducing each year. This adds to impact of rising premiums for members.
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, that is the amount the Government provides to help cover some of the cost of health insurance premiums, adds to the impact of the premium adjustment.
Additionally, individual increases may be higher because of a member’s product, family structure and state.