In 2020, as part of our commitment to supporting our members when they needed it the most, we put our scheduled 1 April premium increase on pause due to the widespread financial hardship caused by the COVID-19 pandemic. Read more about the assistance. There are several cost drivers associated with increases to premiums for our members.
Rising healthcare costs. Increases in costs associated with hospital, medical and other health-related services
Increased use of medical technologies. Advances in technology mean improved, more accessible health outcomes for all
We are getting older. Our ageing population means that there’s a greater demand for services and treatments
Chronic illnesses. Diagnosis, treatment and prevention of chronic illnesses is on the rise and providing access to improved interventions required by our members is important to us
Further information about the reasoning for premium increases and the approval process involved is available from the Private Health Insurance Ombudsman.
Other than going directly towards the cost of claims, we also invest your premiums in programs and initiatives to help our members live their healthiest lives, like our Health and Wellbeing Programs.
As COVID-19 continues to evolve and impact our lives in unexpected ways, Westfund is focused on helping you manage your health and financial wellbeing throughout this challenging time.
We’ve extended access to a number of programs and support measures until at least the end of 2020.
And, we’re continuing to monitor developments across Australia to ensure
we’re doing all we can to meet our members' needs today, while preparing for what the future may hold.
We understand that affordability has never been more important for our members and we remain committed to providing you with value when it comes to your health cover. While nobody likes to pay more, premium increases reflect rising industry costs. Below is some information to explain what is driving these increases.
Here's a snapshot of some of the claims we paid to our members in 2019
|Average age 49||↑24% average benefit••|
|2. Lens procedures|
|Average age 72||↑9% average benefit••|
|3. Dental procedures|
|Average age 28||↑15% average benefit••|
|Average age 11||↑14% average benefit•|
|5. Coronary bypass|
|Average age 68||↑6% average benefit••|
|6. Hip replacement|
|Average age 69||↓3% average benefit••|
|7. Obesity procedures|
|Average age 46||↑9% average benefit••|
|Average age 63||↑8% average benefit••|
• per patient 2019 calendar year
•• per patient since 2015 through to 2019 calendar years
The federal government offers a range of financial incentives and penalties to encourage Australians to take out private health insurance. These initiatives may affect the cost of your policy, whether that be through a discount or a surcharge.
Australians may choose to take out a hospital policy in order to avoid paying the Medicare Levy Surcharge (MLS). MLS applies to Australian tax payers who do not have private hospital cover and who earn over a certain amount. The aim of the surcharge is to reduce demand on the public health system by encouraging those on higher incomes to purchase and use private health cover.
The Australian Government Rebate on private health insurance is a way to help offset the cost of private health insurance premiums for policyholders. The rebate is income tested and applies to hospital, extras and ambulance policies. The rebate can be claimed in the form of a regular premium reduction through your private health insurer or can be claimed with your annual Income Tax Return.
Lifetime Health Cover (LHC) loading was implemented to encourage younger people to take out hospital cover earlier in life and to maintain that cover. LHC works by applying a financial penalty to those who choose to take out hospital cover after they turn 31 in the form of a two per cent loading for each year your age exceeds 30 when you do choose to join.
The federal government has introduced a range of reform measures aimed at making private health insurance more transparent and affordable for consumers. As part of these reforms, private health insurers are now able to implement premium discounts of up to 10 per cent on eligible hospital cover for people aged between 18 and 29 years of age.
We know that there is a lot of information from a lot of different sources around the annual premium adjustment and that sorting through it all can be confusing. We've answered some of our members' most frequently asked questions.
While we acknowledge that nobody likes to pay more, premiums must keep pace with the rising costs of healthcare to ensure we can continue to offer competitive pricing and products for our members into the future.
Private health insurance is a highly-regulated industry and our regulator, Australian Prudential Regulation Authority (APRA) requires all funds to retain sufficient capital to pay out any delayed elective surgery and to meet the ongoing healthcare needs of all members.
As a member-owned fund, we don’t want to increase premiums. However, we need to make sure we keep pace with increasing health costs, statutory prudential requirements and, most importantly, maintain our commitments to our members.
We have continued to provide support and to pay claims for our members throughout COVID-19.
Our support has included paused premium increases, access to financial hardship support, teleheath and an expanded suite of Health and Wellbeing programs.
Claims that health funds have profited from COVID-19 are unsubstantiated.
These claims are based on the assumption that elective surgery was to be shut down for six months, instead of the six-week postponement that occurred (excepting Victoria).
We also understand reduced access to elective surgery and some extras services have impacted members throughout this period.
However, we are now seeing claiming levels return to normal, if not higher rates than usual as backlogs are cleared.
By the end of May 2020, elective surgery was back to 66 per cent of normal levels. At the end of June 2020 allied health treatment services were above normal weekly services levels (102 per cent):
During the six weeks of elective surgery restrictions, we continued to cover vital surgery, mental health treatments, telehealth and allied health services.
(Data provided by Private Healthcare Australia)
Premium increases are effective as of 1 October 2020.
Payments made on or after this date will be calculated at the new rate.
Private health insurers in Australia operate under the ‘Community Rating’ system. This is a government requirement.
Community Rating means that all consumers are entitled to buy the same product, at the same price and are guaranteed the right to renew their policy. The only exception to this is the Lifetime Health Cover loading, which can affect the cost of your premium if you sign up after the age of 31.
A health fund cannot refuse to insure you or refuse to sell you any policy you want to buy on the basis of your health or how likely you are to claim.
Basically, irrespective of how you use (or don’t use) your cover, we do not charge you differently based on your health status or age.
At Westfund, we let our members lock in their current rate by paying their premiums in advance. You can be paid up to 18 months in advance. If you want to do this, you need to pay before 30 September 2020.
Members who choose to pay their premiums in advance can pay up to 1 April 2022.
If your financial hardship relates to COVID-19, we recently announced the extension of our support measures for members.
Members who are experiencing financial distress right now shouldn’t be burdened with additional concerns around health cover payments.
If you are under financial stress and would like to learn more about your options, including temporarily suspending your membership, please speak with one of our friendly staff members who are here to help.
We are also on hand to discuss your cover options with you to ensure we continue to meet your needs.
If you have concerns about the impact of this premium increase, please don’t hesitate to get in touch. We are happy to discuss any options available, including:
Changing how often you make your payments. By making payments more often, each payment can be more manageable.
You could also look at opting for a cover with an excess, a Hospital only cover or Extras only cover. Our excess options on selected covers include Nil, 250, 500 and 750 options, depending on your selected cover.
Yes, you don’t have to do anything in regards to changing your payroll or direct debit.
If you pay via BPAY, you will need to adjust your payment from 1 October 2020 to ensure your policy remains up to date.
As we are not-for-profit and invested in the satisfaction of our members, we’re always looking for ways to improve benefits and services.
We review our benefits regularly to make sure we are offering good value, especially on the services our members want most. You can see how our benefits compare to other health funds on the Federal Government’s comparison tool.
This is an Australian Government comparison site which also provides more information about why premiums rise and other relevant health insurance information.