Each year the Minister for Health reviews and approves new private health insurance premiums across the industry, to take effect from 1 April.
If you're a Police 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. However, if you have any additional questions, or want to discuss changes to your policy specifically, please don't hesitate to contact us on 1800 603 603 or email us. We're here to help.
Why do premiums go up?
Annual Private Health Insurance premium changes 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.)
- Aging 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 Australian Government Rebate on private health insurance (PHI) is annually indexed on 1 April by a Rebate Adjustment Factor (RAF) representing the difference between the Consumer Price Index (CPI) and the industry weighted average increase in premiums. The RAF calculation is set out in the Private Health Insurance (Incentives) Rules 2012 (No. 2).
The RAF for 2022 has been calculated as 1. This means there will be no changes to the Australian Government PHI Rebate on 1 April 2022. The PHI Rebate tiers for 1 April 2022 to 31 March 2023 are as followed:
| Base Tier | Tier 1 | Tier 2 | Tier 3 | |
|---|---|---|---|---|
| Under 65 | 24.608% | 16.405% | 8.202% | 0.000% |
| 65 – 69 | 28.710% | 20.507% | 12.303% | 0.000% |
| 70+ | 32.812% | 24.608% | 16.405% | 0.000% |
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 Police 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 Police 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 Board of Police Health Limited 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).
How does Police Health’s premium increase compare to other health funds?
A breakdown of the premium increases by each private health insurer in Australia can be viewed HERE.
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) as soon as possible - usually late February to early March. If you have any issues you can give us a call on 1800 603 603 or email us at [email protected] and we’ll be happy to help.
How do I switch to Police 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 1800 603 603 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 Police Health; continuity of cover is provided for new members transferring from another registered Australian health insurer. Police 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 1800 603 603.