HomeHealthMajor health fund to return COVID savings to customers

Major health fund to return COVID savings to customers

Medibank has announced that it will return $105 million to customers through premium relief from the money it has saved due to the COVID-19 pandemic.

The money will be available to Australian Medibank and ahm customers holding an active hospital and/or extras policy at any time during the period between 1 July 2020 and 30 June 2021.

The move by Medibank follows the lead set by Australia’s fifth largest health insurer HBF in March when it announced that it would not financially benefit from the COVID-19 pandemic and would return all surplus funds to members.

Read more: AMA concerned over health fund proposal

According to Medibank, approximately two million policies will be eligible, and the majority of customers should expect to receive the premium relief by the end of September.

Medibank’s premium relief will provide up to $52 for extras only policies and up to $175 for hospital and extras policies – which on average will be $25 for extras only policies and on average around $60 for hospital and extras policies.

Medibank explained that the premium relief would be applied to policies automatically, and that customers would not need to do a thing to access the relief.

Read more: Ten ways to get cheaper health insurance

HBF explained that its returns policy would have around half a million eligible policies, which would result in a payment per policy of between $31 (extras only) and $140 per policy (hospital and extras).

HBF chief executive John Van Der Wielen said the organisation was committed to return all COVID benefits back to members.

“HBF is honouring its promise made to members last year that they would be the beneficiaries of any surplus funds arising from the COVID-19 pandemic,” Mr Van Der Wielen said.

Read more: Should you cancel your health cover?

“When elective surgery and ancillary services became available again, particularly in WA where the majority of our members reside, we saw an increase in claims but not the surge we had anticipated. With claim levels now normalising, it is clear a meaningful portion of the deferred claims provision will not be utilised and we are committed to returning those funds to members.

“We are working through the details, but our principle is for a fair and simple approach to this distribution, with funds paid directly to eligible HBF Hospital and Extras policyholders.”

Medibank chief executive David Koczkar echoed his organisation’s commitment not to benefit from the pandemic.

“We said right from the start of the pandemic that we would not profit from COVID-19, and that we were committed to returning any COVID-19 savings back to our customers because it is the right thing to do,” Mr Koczkar said.

“Private health insurers have been required by the industry regulator to hold funds in order to be able to pay for an anticipated catch-up in elective surgeries after COVID-19 restrictions were lifted. With the majority of claims normalising, we have been able to allocate the excess funding to be returned to our customers.

“This latest phase of our package will be welcomed by our customers, some of whom are still doing it incredibly tough as lockdowns continue in various locations across the country.”

Jodi Bird, an insurance expert with consumer group CHOICE, has now called on other Australian health funds to follow the lead set by Medibank and HBF.

“The remaining health insurance funds need to stop being laggards and return what they didn’t earn,” Ms Bird said. “The community is facing new financial stress from lockdowns around the country, with many people still recovering from the existing economic impact of COVID-19, and the businesses we rely on for our health and wellbeing shouldn’t be using the COVID-19 shutdowns of health services to boost their bottom lines.

“Medibank and HBF have done the right thing by their members. Big funds like Bupa, HCF and NIB have absolutely no excuse now – Australians need financial support and they need it now,” she said.

“People want funds to deliver fairness, by being open with their customers and the community about how and when they are going to return their money from when people were paying full price for a service they couldn’t access.

“People are hurting right now with lockdowns across the country. If you are experiencing financial hardship, you should contact your health fund and talk through what they can do for you.”

Are you with Medibank or HBF? Would you consider switching funds based on the way these two funds have prioritised members during the pandemic? Why not share your thoughts in the comments section below?

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Ben Hocking
Ben Hocking
Ben Hocking is a skilled writer and editor with interests and expertise in politics, government, Centrelink, finance, health, retirement income, superannuation, Wordle and sports.
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