Premiums have been reviewed by the Minister for Health and will be increasing as of 1 April 2018. The good news is we've kept our increase as low as possible.
If you're an Emergency Services Health member, you'll receive personalised information from us about how you're affected. For general questions about the premium increase we have developed this list of FAQs. Of course, if you have any other questions please just contact us on 1300 703 703 or email us.
Why do premiums keep going up?
Private Health Insurance premium increases are necessary to ensure health funds have adequate capital and income to pay for what they will be expected to fund in the next 12 months. The amount needed to cover costs continues to climb due to a number of factors, including;
- The increased cost of an episode of hospital treatment
- The increasing cost of a service provided by health professionals which may be reflected as higher benefits paid for services
- Increases in the number of services claimed against an insurer relative to the number of policies
- Introduction of new medical technology and equipment
- Consumer expectations (e.g. seeking better quality care, more thorough testing etc.)
- Ageing population
Other factors that may impact your premium include changes to the Australian Government Rebate on private health insurance and the application of the Lifetime Health Cover Loading (LHC).
How will changes to the Australian Government Rebate on private health insurance (Rebate) affect the cost of my health insurance?
If eligible, the Rebate is a contribution the Government makes towards the cost of your private health insurance to make it more affordable and accessible.
The Government adjusts the Rebate on 1 April each year based on a calculation referred to as the ‘Rebate Adjustment Factor’ (RAF) which incorporates any changes to the industry weighted average increase in premiums and the Consumer Price Index. The RAF is set out in the Private Health Insurance (Incentives) Rules 2012 (No.2).
This year the Rebate Adjustment Factor is 0.980, compared to 0.968 in 2017. Other than for income Tier 3 which attracts no rebate, this means that the available percentage rebate has reduced. Therefore if you’re eligible to claim the Rebate, be aware that this change will affect how much you pay for private health insurance. To find out how the change in Rebate will affect you personally, refer to the personalised premium increase information sent to you by Emergency Services Health, or visit health.gov.au to view the updated Rebate tiers.
Why is the premium increase more than the increase in Consumer Price Index (CPI)?
It’s a common misconception that CPI is related to health insurance costs. Health insurance increases are not directly correlated with increases in CPI because the two figures are indicative of different things:
- CPI is reflective of price increases for a wide range of goods (with healthcare being a subset), and the CPI does not take into account frequency of use; while
- Changes in health insurance premiums usually reflect the increased cost of healthcare (which traditionally runs above the rate of CPI), as well as any increased frequency of use.
Why is my premium increase different to Emergency Services Health’s average increase?
Premium increases differ between policies based on the type of cover, how many people are insured on a policy and in what state or territory a policy is purchased. The figure quoted as Emergency Services Health’s average premium increase by the Department of Health is an average increase across all policies, and so it may be different to the increase applied to your situation.
Who authorises an increase in premiums?
The Police Health Group Board, who governs both Police Health and Emergency Services Health, considers and applies for proposed changes to premiums. Under the Private Health Insurance Act 2007, private health insurers must obtain approval from the Commonwealth Minister for Health before applying a rate increase.
If the private health insurer does not provide sufficient information to the Minister to demonstrate that an increase is necessary, then approval is not given. Likewise the Minister has the power to increase premiums beyond what is requested if it is believed that the private health insurer does not have enough funds in reserve to pay the required amount of member benefits.
In the submissions to the Minister, private health insurers must provide detailed financial information and cost and benefit projections to justify any increases. An independent review of this information must also be undertaken by an Appointed Actuary prior to submission.
The proposed increases are examined by the Department of Health and by the Australian Prudential Regulation Authority (APRA).
Why do couples pay the same premiums as families?
There are some covers on the market that have a lower premium for couples than for families, but they are generally policies with a lower level of cover or exclusions.
The reality is that a large portion of couples are in the older age bracket where they generally have greater health needs. It is likely that if Emergency Services Health made a quality couple's cover available, it could actually cost more than the family cover.
Shouldn’t large families pay higher premiums?
The Private Health Insurance Act 2007 provides that all families be treated the same. So whether there is just one child or ten, health funds cannot treat them differently.
Also, children are an important part of a balanced health insurance system. Without a younger generation coming through and into private health insurance, we would simply have a membership that is ageing and the cost of premiums would rise rapidly. It is likely larger families from the past help keep premiums down today, as will today's large families do so for the future.
How does Emergency Services Health’s premium increase compare to other health funds?
We’re pleased to advise that Emergency Services Health’s average industry increase is below the industry average. A breakdown of the premium increases by each private health insurer in Australia can be viewed HERE.
Why don’t you offer pick and choose options?
Emergency Services Health only offers top level cover because we genuinely care for the health and wellbeing of the emergency services community and it is important to us that our members know they will be comprehensively covered for health services they may require, especially the unpredictable.
Complaints against health insurers are commonly related to misunderstandings about what is covered for hospital treatment in a policy, and so we keep our products simple by only offering top level hospital coverage which boasts no excesses, co-payments or exclusions, plus you have your choice of recognised provider.
I hardly ever make claims, what’s the point of keeping my cover?
It’s important to remember that the point of insurance is to be a safety net for the unexpected. You can never predict what health issues or injuries you or your family may be faced with in the future, but by maintaining your health insurance through Emergency Services Health you can enjoy the peace of mind of knowing that we’ll have your back if or when you need us most.
Of course preventative health is also important to consider, and can help ward off more serious health issues down the track, so if you feel like you’ve not been getting the most out of your cover now is a good time to think about what measures you could be taking to maintain your good health. For example if you have Extras cover with us you may consider booking in a dentist appointment, a consult with a dietitian or visiting a podiatrist.
I haven’t received my premium change notification. How do I get it?
A copy of your premium change notification will be sent to you by email or post (depending on your preference). If you have any issues you can give us a call on 1300 703 703 or email us at firstname.lastname@example.org and we’ll be happy to help.
How do I switch to Emergency Services Health from another fund?
We make it really easy for you to switch. Simply join online and complete the section about transferring from another health fund when prompted. Alternatively you can call us on 1300 703 703 and we can help you through the process. When we receive your application we inform your previous insurer that you wish to cancel your cover with them. If you were paying them by direct debit, you may also need to cancel any direct debit arrangement.
Rest assured there are no penalties in switching to Emergency Services Health; continuity of cover is provided for new members transferring from another registered Australian health insurer. Emergency Services Health will honour any waiting periods served for equal or greater cover with your previous insurer. To get continuity of cover you must have already served the relevant waiting periods for the benefit payment involved, join us within one month of ceasing membership of the previous private health fund and pay premiums from that cease date. For more information give us a call on 1300 703 703.