Rate rise

Premium change 2020

You should've heard from us by now about the increase to your membership payments from 1 April. We know – we don’t like it either.

Happily, this is our lowest average (overall) premium rise in the last seven years at 3.48%.

For changes to our Access Gap scheme, please visit our Access Gap page.

 

As a not-for-profit fund we only charge you what it costs to pay member claims and run the fund.

The good news is that last financial year we paid over $131 million for member benefits out of $147 million in premiums (or 89% of our revenue).

We try to keep our costs down in other ways too. Like:

  • running as efficiently as possible so we have low administration costs (just 9.72% of the premiums we received in 2018/19)
  • working with the Australian Health Service Alliance (AHSA) to have more bargaining power with hospitals and doctors
  • working with industry bodies to push the Government for changes that make healthcare more affordable for everyone

Not only that, but we also find ways to make money that we can put back into services for our members. At the moment we do that by managing two other health funds and Allianz Global Assistance’s Overseas Visitors Health Cover.

But we get it, it can be a tough balance between looking after your health and looking after your hip pocket. If you’re wondering whether your cover is still right for you, we’re happy to talk you through your options and see if we can save you $$$. Just give us a buzz on 1800 808 690 – we’re here to help!

With Peoplecare you can.

If you prepay in March 2020 (see dates below) you won't have to pay this year's rate increase for the length of time you prepay for. You can prepay for up to 12 months. You can do it right now on Online Member Services or give us a buzz.

  • Direct debit – by Wednesday 25 March 2020
  • BPAY – before your bank's close of business on Friday 27 March 2020
  • Credit or debit card – by Tuesday 31 March 2020 5pm (or before midnight using Online Member Services)

If you get the Australian Government Rebate on Private Health Insurance, the increase to the amount you pay for health cover is made up of two things – an increase to our premiums and a decrease in the percentage the Government pays towards your rebate (although the dollar amount of the rebate does increase due to the premium rise). If you’re wondering about your premium increase, it’s important to take the Government Rebate into account.

Old rebate (from 1 April 2019)

 

Income threshold

 

Age & Rebate amount
(age of the oldest person on your cover)

Under 65 years

65-69 years

70+ years

Base Tier

Single
$90,000 or less

Family*
$180,000 or less

25.059%

29.236%

33.413%

Tier 1

Single
$90,001 – 105,000

Family*
$180,001 – 210,000

16.706%

20.883%

25.059%

Tier 2

Single
$105,001 – 140,000

Family*
$210,001 – 280,000

8.352%

12.529%

16.706%

Tier 3

Single
$140,001 or more

Family*
$280,001 or more

0%

0%

0%

*If you’re a family with children, the income threshold for each tier is increased by $1,500 for every child after your first. Family includes single parent families.

New rebate (from 1 April 2020)

 

Income threshold

 

Age & Rebate amount
(age of the oldest person on your cover)

Under 65 years

65-69 years

70+ years

Base Tier

Single
$90,000 or less

Family*
$180,000 or less

24.808%

28.944%

33.079%

Tier 1

Single
$90,001 – 105,000

Family*
$180,001 – 210,000

16.539%

20.674%

24.808%

Tier 2

Single
$105,001 – 140,000

Family*
$210,001 – 280,000

8.268%

12.404%

16.539%

Tier 3

Single
$140,001 or more

Family*
$280,001 or more

0%

0%

0%

*If you’re a family with children, the income threshold for each tier is increased by $1,500 for every child after your first. Family includes single parent families.

All health funds have different increases and different products have different increases too. Peoplecare’s average increase this year is the lowest in eight years. To be able to keep paying claims, we have to base our increase on what our members claim for – not the overall claims across the industry.

While we do everything we can to keep our prices competitive, we want to make sure that we don’t cut costs by taking away any of the benefits or services we offer. Our average rate rise is 1.42 percentage points lower than last year.

And you can rest assured that we don’t just pick any old price when we increase our premiums – all health fund increases have to be checked over and approved by the Government.

 

When it comes to rate rise time, we look at every level of cover individually and work out how much we need to increase the cost by to keep people covered. There are a few things we look at when we’re doing this review, including the cost of claims for members on the cover.
The other thing that comes into play is the adjustment to the Government Rebate that happens every year. The Government is now covering less of the cost of your health cover, and unfortunately that one’s out of our control (and it’s the same for all health funds).

We’ll keep doing everything we can to keep our costs as low as possible while still giving you great quality cover.

We only ever increase membership payments by what it costs to pay claims and keep our fund running, and any increases we make have to be closely looked at and approved by the Government. This is the same for all health funds.

We can’t charge people less if they don’t use their cover and more if they do. This is a rule made by the Government to make sure that everyone has the same access to private health insurance (it’s called ‘community rating’).

You don’t need to start paying the new premium until your next payment is due. For example, if you’re paid up to 31 May 2020, you’ll start paying the new amount from 1 June 2020.

There are plenty of reasons that we think private hospital cover is definitely worth it. Things like:

  • knowing you can have access to the best private hospitals with state-of-the art facilities
  • being able to choose your doctor
  • not having to spend months (even years!) on a public hospital waiting list, by going to a private hospital
  • saving yourself tax (if you’re a high-income earner) by not having to pay the Medicare Levy Surcharge
  • avoiding a Lifetime Health Cover loading (by having hospital cover before you turn 31)

When you think about health insurance it’s important to think about more than just the cost – it’s about giving you more choice for your healthcare, less time waiting for the services you need and (most importantly) the peace of mind to know that you’ll be looked after when you need it most.

You might be surprised just how much a hospital stay can cost without private hospital cover. To give you an idea, here are just some of the hospital bills we’ve paid for our members in 2019:

  • $21,000 for a 36-year-old man to resurface his hip
  • $104,000 for a 68-year-old woman’s spinal surgery
  • $30,000 for a 43-year-old woman’s depression treatment
  • $28,000 for a 45-year-old man’s brain lesion removal
  • $22,000 for a premature baby’s care
  • $26,000 for a 27-year-old woman’s pain management device operation

Again it’s completely up to you, but you might want to get that money tree planted just in case.

There are a number of things Peoplecare does to control premiums for our members:

  • Keep our administration expenses as low as possible (measured as a % of premiums)
  • Made our 2020 premium rise our lowest in eight years
  • Create a stable suite of products that are designed to be sustainable into the future
  • Increase external revenue. At a time when members are feeling premium pressure, it’s nice that we have money flowing into Peoplecare that helps to relieve that pressure. Last financial year we achieved $5.9 million in earnings from managing services for external organisations – an increase of 24% on the year before.

 

Health insurance is being used more than ever. The cost of claims is going up, so the price of holding it increases.

We’re a not-for-profit, so you only pay what it costs us. At the same time, we’ve reduced what it costs us to run the fund.

We do our best to keep hospital and doctor expenses as low as possible. To try to reduce your out-of-pocket costs as much as possible, we have Access Gap arrangements with over 36,000 doctors across Australia. This means you will have either no gap (where we pay the full cost of your treatment) or a known gap (where you’ll know your out-of-pocket costs before you have treatment). Read more on our Access Gap page.

Does Peoplecare pay dividends to its members?

No. Our constitution prohibits us paying dividends to anyone. We are a proud not-for-profit, member-owned fund. The fairly narrow surpluses we earn help sustain us as a fund and enable us to pay the expensive claims our members rightfully deserve towards their health.