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Find out what you need to know, from why premiums increase and how it works to how to save on your premium.
All Australian health funds review their premiums every year, taking into account the rising cost
of healthcare services. But what does that mean? Things that contribute to the rising cost of
healthcare include our aging population, a rise in chronic illnesses, a rise in the cost of medical
procedures due to advancing technologies, and more people using the healthcare system.
As a not-for-profit health fund, the only reason we increase premiums is to ensure we can continue
to cover the cost of claims and provide service to our members.
To calculate a premium increase, we use claims and service cost data from previous years to estimate
the amount we’ll need to spend in the coming year. Premiums are then adjusted on a product by
product basis so we can safely cover those predicted costs.
Premium increases aren’t calculated at an individual member level. Your premium increase just depends
on the kind of product you have.
Community rating legislation means everyone with the same product (e.g. Top Hospital) will
have the same premium increase.
Your final premium amount will be a combination of the product’s increase, any discounts (like a
direct debit or corporate discount), your
Lifetime Health Cover loading, and your
Australian Government Rebate on Private Health Insurance.
The way health funds calculate premium increases doesn’t go unchecked. The Federal Health Minister’s
office as well as APRA (Australian Prudential Regulation Authority) are required to sign-off
on all premium increases, and have the final word on whether the proposed increases are reasonable.
You’ll be notified of your new premium by letter or email between 12 February – 28 February.
HBF's publicised increase of 3.75% is an average across all our products. The actual price increases
for individual products may be higher or lower than this average.
Premiums increase more than CPI (Consumer Price Index) because CPI is not a true reflection of the
healthcare inflation rate.
CPI is calculated using the weighted average of the cost of a basket of goods and services in Australia
– this basket includes everything from your groceries and transport, to your medical costs.
CPI is generally much lower than the healthcare inflation rate because it averages out other items
which, unlike healthcare, don’t tend to see significant increases in cost over short periods
Your premiums go up even when you don’t claim because they aren’t based on your personal claiming
In Australia, health insurance works differently to other types of insurance. With things like car
or home insurance, your premiums go up depending on how likely you are to claim, or every time
you do claim (called ‘risk rating’).
Health insurance is completely different: your premium won’t increase or change as a direct result
of you claiming, or even how likely it is that you will claim.
That’s thanks to
community rating, which is legislation that basically says the price of your health insurance
shouldn’t depend on how healthy you are (or change based on any other personal traits) – it should
cost the same for everyone.
Community rating protects all Australians by making sure those who are sick or injured can easily
access the help they need, when they need it, and not be penalised with a higher premium when
they do claim.
No. We’re a not-for-profit health fund. We don’t have shareholders to pay, so we only ever increase
premiums to ensure we can continue to cover the cost of claims and provide service to our members.
To keep premium increases to a minimum, we have taken a proactive approach, looking for opportunities
to reduce costs both internally and externally.
We’ve been supportive of Government initiatives to contain health costs such as reducing the price
of medical devices, which is a saving we’ll pass onto our members.
As a business, we’ve contained internal costs by not renewing our AFL sponsorship, ceasing our Hospital
Liaison Officer program and closing branches where we have seen a significant drop in member
There are many things you can do to lower your premium. You can:
To get the most value from your health cover, the best thing to do is make sure your policy features
the services you need to support your health and lifestyle.
We always encourage our members to be on a product that suits their needs.
If you feel your product isn’t quite right for you,
get in touch with us and we’ll help you review what you’re covered for and whether there’s
a different product that better supports your needs.
Just be aware, from a hospital perspective, a lower level product may not include all the other services
you’d like covered – for example, letting go of maternity may also mean losing cover for cataracts
and joint replacement. When it comes to your extras, downgrading means you may see a decrease
in the amount you can claim on services like dental, optical and chiro.
It’s also worth noting if you decide to downgrade then upgrade again later, you will have to re-serve
waiting periods on services not covered or covered to a limited extent on the lower-level product.
The reason most people keep their private health insurance is the same as why they maintain their
car or home insurance: it’s about insuring something important – your health – against the unexpected.
With hospital insurance, your health fund helps cover the cost of treatment in a private hospital.
But what about the public hospital system? Yes, it is free, but there is a trade-off.
In the public system, unless it’s an emergency, you’ll be placed on a waiting list. On the other
hand, going to a private hospital using your hospital insurance means you can skip that public
waiting list, getting treatment at a time of your choosing. With hospital insurance you can also
choose your specialist and gain access to a private room, so long as one is available.
Extras insurance helps cover the cost of your everyday healthcare services. It covers outpatient
services that Medicare generally doesn’t cover – that’s things like dental, optical and chiro.
Both the public and private healthcare systems have their benefits. Ultimately, deciding on whether
private health insurance is worth it depends on what’s important to you.
With HBF you can feel confident you've made the right choice. More than half of all West Australians
choose us over other funds because:
Yes. We can accept a manual payment of up to 18 months’ premium (from the date you make the payment)
at the old rate, provided the payment is made before 1 April.
If you’ve already paid past 1 April, we can still take a manual payment at the old rate so long as
you make that payment before 1 April.
Please be aware if you currently have a direct debit or corporate discount applied to your premium,
you will lose it if you choose to make a manual payment.
Please note: The 4% direct debit discount does not apply to all products.
Payments must be
received by HBF before 1 April. If you’re paying by BPAY or other digital means, you
may see payments debited from your account before this date, but it is the
date received by HBF that is important.
Online banking processing times can vary, so we strongly recommend lodging your payments well in
advance of 1 April.
You also have the option of processing your payment immediately. Simply contact us on
133 423 or visit your
local branch to make your payment today.
Please note: This year, 1 April falls on Easter Sunday – if you want to pay via BPAY
or other online banking methods please do so well in advance of the Easter weekend to ensure
the transaction has been processed.
Legislation sets the conditions under which health funds can offer discounts. The Private Health
Insurance Act 2007 stops us from maintaining your direct debit or corporate discount if you make
a manual payment. The condition of the discount is that funds are automatically transferred,
and not made manually. (Private Health Insurance Act, 2007; 66-5(3))
Your Government rebate may be less than it was last year because of the way the rebate is calculated.
While your rebate will change depending on your income and age, the rebate percentage itself
is adjusted year on year in line with the overall rate of inflation (Consumer Price Index; or
CPI) and generally decreases over time.
Because of the formula the government uses to calculate the rebate, if the average health insurance
premium rise is greater than the CPI, the rebate percentage will reduce. As the cost of healthcare
generally rises significantly more than the CPI, the rebate percentage will continue to decrease
year on year.
The rebate you receive is calculated based on your age and income, which we request at the time you
set up your health insurance policy.
If you have not given us information about your age or income tier, or your information is not accurate,
it may impact your next tax return.
To check or update your rebate details, login to
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