- Health Minister approves 2021 premiums
Health Minister approves 2021 premiums
As announced by the Minister for Health, Greg Hunt, private health insurance premiums will increase across all funds from 1 April 2021. The industry average increase will be 2.74%.
The Minister’s approval of 2021 premiums is consistent with the usual timing of annual premium submissions (although the 2020 premium adjustment was postponed by health funds until October 2020 due to the outbreak of COVID-19).
The premium increase Defence Health put to the Minister is based on our forecasts of growth in health services and costs, as well as the cost of operating the fund. The premium that applies for each of our members is calculated according to the level of cover held; state of residence; and any rebates or loadings that apply.
In February 2021, every Defence Health member will receive detailed information about the premium that will apply to their cover from 1 April.
As a not-for-profit health fund, Defence Health is motivated to keep premiums as low and as affordable as possible. But for the fund to be sustainable for the long term, it must cover the cost of health benefits paid to members.
Defence Health has sought to increase premiums by the bare minimum. Even after the increase takes effect in April 2021, Defence Health will remain competitively priced; will continue to prioritise out-performing the industry in terms of benefits returned to members; and will continue to lead the industry with one of the lowest management expense ratios.
And we know for many Australians, maintaining their private hospital cover has never been more important. COVID-19 has resulted in a significant backlog of elective surgery in the public sector. Estimates by Private Healthcare Australia are that it will take 1.5 – 2 years to clear the waiting list for common procedures in public hospitals.