Premium Review 2008
- Is MBF planning to increase membership premiums? Why is MBF having a premium review?
- When will I be notified of any changes?
- When will my premium changes be effective?
- Why are premiums being increased?
- Will the change affect my Federal Government Rebate?
- What is the benefit to me if extras benefits are increased when I don't even claim very much on my level of cover?
- Why is the increase on my level of cover significantly higher than the MBF average increase?
- I've been a customer for many years. Where's the reward for my loyalty?
- Why is my increase higher than what is being reported in the media?
- MBF's reported a strong net profit in 2006-2007. Given that profit, why are you increasing premiums?
- I am unhappy with the increase. Why shouldn't I leave MBF and go to another fund or drop Private Health Insurance altogether?
1. Is MBF planning to increase membership premiums? Why is MBF having a premium review?
This is the time of year when MBF and most other health funds review their premiums. MBF has received approval from the Minister for Health & Ageing to revise premiums and make changes to some levels of cover. As always our objective is to ensure we can support the ongoing health needs of our members and the increases reflect the rise in costs and utilisation of health services.
In the last financial year MBF provided over $1.65 billion in benefits to customers, an increase of $109 million on the previous year.
2. When will I be notified of any changes?
You will be notified by mail of any changes to your premiums before 15 March 2008.
3. When will my premium changes be effective?
If you are affected by the premium change, you will start paying the new premiums in your next payment on or after 1 April 2008. We will send you a personal letter with the new amounts for your level of cover.
4. Why are premiums being increased?
MBF and most other health funds review their premiums annually. MBF reviews premiums by forecasting service costs (hospital, medical and ancilliary) and likely utilisation of those services.
One of the main causes of increased costs in hospitals is the increasing cost of wages and other operational costs e.g. electricity.
Furthermore, in the last decade improvements in medical technology have increased average life expectancy in Australia by over 3 years , but they come at a cost. Some of these improvements include:
- Improved imaging technologies - MRI, CT and PET scans
- Key hole and other non-invasive surgery eg. Laparoscopy/arthroscopy
- Better prosthetics eg. Defibrillators, drug eluting stents, insulin pumps etc.
MBF have increased claims payments by $109 million between 2006 and 2007 financial years. Similar claims payments have been experienced by other funds and the industry as a whole.
More information about the Premium Review 2008.
5. Will the change affect my Federal Government Rebate?
If you are registered to receive the Federal Government Rebate on private health insurance, it will apply to all new premiums, continuing to make your MBF policy as affordable as possible. We will advise you of your new rebate (if applicable) amount in your premium review letter.
6. What is the benefit to me if extras benefits are increased when I don't even claim very much on my level of cover?
We have listened to our customer’s feedback about wanting more value from health insurance cover overall and have made changes to some levels of cover where possible to facilitate this.
If you would like to discuss ways to maximise your current policy with MBF, please contact us.
7. Why is the increase on my level of cover significantly higher than the MBF average increase?
MBF calculates an average from its national product portfolio. Being an average, some customers will have a lower than average increase and others will have a higher than average increase. Products are priced by many factors such as, how many claims are made against the product. A level of cover, with a higher than average increase, generally reflects higher utilisation together with the amount of benefits being paid on that product.
8. I've been a customer for many years. Where's the reward for my loyalty?
We are always seeking ways to add value to the services and products we offer however the impact that any loyalty scheme would impose, due to the large customer base MBF has, would have a significant accrued cost.
This in turn would need to be reflected in future premiums, and is the primary reason why MBF has not introduced such a scheme to date. The Commonwealth has in part addressed the issue of age and membership/policy rewards with the introduction of legislation around Lifetime Health Cover that gives incentives to Australians to take PHI at an early age and the tiered Government Rebate that reduces the cost of membership for older Australians.
More information about the Premium Review 2008.
9. Why is my increase higher than what is being reported in the media?
MBF and most other health funds annually review their premiums. The focus is on the average increase across the entire industry. Average premium increases may vary from insurer to insurer as they have a different product portfolio, member base and claiming patterns. Because MBF’s average increase is an average across the entire fund, the increase for some members will be lower than the average and higher for others. Our products are priced individually and any increases reflect claims experience on each product. A level of cover with a higher than average increase is a reflection of the costs and returns paid on that level of cover.
10. MBF's reported a strong net profit in 2006-2007. Given that profit, why are you increasing premiums?
A strong financial performance is in your interest as a customer, as we can continue to support your healthcare needs and develop the business via an expanded offering of health protection. It is important to put our results in perspective.
A large % of our net profit in 2006-2007 was from investment income. Experience elsewhere in the health insurance industry has demonstrated the need to maintain strong financial reserves to support claims.
11. I am unhappy with the increase. Why shouldn't I leave MBF and go to another fund or drop Private Health Insurance altogether?
MBF Private Health Insurance provides customers with a valuable asset that helps protects the health of you and your family.
If you would like to discuss ways to maximise your current policy with MBF, please contact us.
Holding private health insurance gives you control and choice:
- Control – A say in when you are treated
- Choice – Of Doctor and hospital
- Holding private health insurance gives you peace of mind – Private health insurance covers you for some extras items not covered by Medicare.
The Federal Government also offers subsidies and incentives:
- The Federal Government rebate
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- The government is contributing 30c – 40c for every $ you contribute
- Avoid the additional 1% Medicare Levy Surcharge, if you are a higher income earner (provided you have appropriate private hospital cover).