All about premiums
What influences premium changes?
Rising healthcare costs
Healthcare costs continue to rise year on year. These rising healthcare costs combined with a growing number of claims, saw the total amount we paid in claims grow by 10.8% in 2017 (from 2016).
Premiums usually increase with age, this is because as we get older there’s generally a need to claim more often, and for greater amounts. In particular, members turning 21 may notice a larger premium increase than usual because from this age, an adult premium rate applies.
Rewards and discounts
Some members may qualify for discounts on their premium. These include a direct debit discount, low claims discount, healthy lifestyle reward, and free child discount.
Work scheme arrangements
If you’re part of a work scheme, it’s likely that you receive a discounted rate from private membership rates. This discount is reviewed each year and may take into account:
- the number of employees in your work scheme
- the total claims paid for your work scheme
- any subsidy that your employer provides
- the way your premium is paid.
What we’re doing to help keep premiums affordable
Premium affordability continues to be a concern for our members. Here are some of the initiatives to help keep your future premiums affordable.
Strengthening our Affiliated Provider programme
Affiliated Providers are doctors, specialists and facilities that provide healthcare services for members at agreed prices. Making some healthcare services ‘Affiliated Provider-only’, negotiating agreed prices, and partnering with more Affiliated Providers is one way we help to manage rising healthcare costs. We now have the support of over 1,900 Affiliated Providers across 20 specialties nationwide (as at Nov 2017). The programme helps keep rising costs in check and makes claiming and payment faster and easier for members. It has now been effective in saving around $35 million dollars this year.
Recovering costs from ACC
We have a team dedicated to helping members who claim for healthcare services through ACC but are declined. In the 2016/17 financial year, we helped 320 members with ACC reviews, which resulted in Southern Cross receiving reimbursement of $4.7 million for both treatment injury and accident related surgical costs from ACC for claims it had previously declined.
As well as helping to ensure treatment costs are met by the right insurer, this helps members because they may have other entitlements under ACC, such as earnings related compensation, rehabilitation and home help.
Regular plan reviews
We regularly review our plans to make sure they remain useful and relevant. At this time, we also take steps to help keep premiums affordable and ensure members get long-term value from their insurance. For example in 2017 we significantly extended the list of healthcare services that require members to see an Affiliated Provider, increased some benefit limits and added some new benefits so members can have more cover when they need it.
We also closely monitor the cost and effectiveness of new medical technologies, procedures and services before we cover them to ensure they provide a clinical benefit to our members at an acceptable cost, and that the technology aligns with our assessment guidelines.
Improving premium affordability for our older members
From 1 November 2016 we began phasing in a change to Southern Cross' common rating to move it from age 65 to age 75 (please note, when we refer to ages here, it means the age of the member at the policy anniversary date). This means that each year for the next 10 years the common rating age will increase by one year, so that by 2026 the common rating age will begin at 75.
Members already common rated (ie those who were 65 or over at 1 November 2016) saw no change and their premium was unaffected by this change. However premium levels may still change for reasons other than age as they reflect the total claims made by all members receiving the common rating. The rates charged for different plans take into account current claims levels and the actuarially projected use of benefits in the coming year.
Those already age 65 years or over who keep their health insurance through to age 75 will not be disadvantaged by the change. What they will pay in premiums will be similar to those moved to the new common rating.
We’ve taken an approach that is as fair as possible and does not disadvantage members who are already on the common rate. Doing it this way means that members who maintain their insurance through to 75 will have paid similar premiums, regardless of the age which they started on common rate.
Increasing online services
We’ll continue to invest in online services such as My Southern Cross and the app, so we can encourage policyholders to self-serve by applying for approvals, managing payments, claiming online, receiving paperless communications, and more – reducing our operating costs in the long term.
Actively promoting better health and wellbeing
We actively promote better health and wellbeing for our members through corporate wellness schemes and our Facebook page in the aim of preventing healthcare problems like diabetes and heart disease – that means a healthier society, and less claims.
Ways to reduce your premium
Pay by direct debit
If you have a private policy with Southern Cross (ie your policy is not in a work scheme), you can get a 2.5% premium discount by paying by direct debit. See how to set up a direct debit.
Add an excess
You may be able to add an excess to your policy. This means when you need to make a claim, you pay an agreed amount. In return, your premium is lower. To see if an excess is available on your plan, please contact us.
Review your level of cover
Your renewal may be a good time to review your cover and make sure it still suits your needs. If you want to reduce your premium and you’re currently covered for extras such as optical and dental treatment, doctors’ visits and prescriptions, consider changing to a plan that covers you for major medical treatment, diagnostic tests and specialist consultations instead. View our plans here.
Further information can be found in our Annual Report.