Health insurance 101: Keeping costs down


In the latest 101 video, we look at the costs that go into health insurance premiums.

As a health insurer, we have a responsibility to make sure our customers’ money offers them the best value for money when it comes to their healthcare today and every day.

Almost 90 cents in every dollar of premiums is returned directly to our customers through claims, but there are a number of factors that mean we need to keep adjusting premiums each year.

Ageing population requiring more health care

The Australian population is ageing, meaning more people are needing health care for longer. Older people live with more health conditions and have a higher rate of chronic disease such as diabetes and heart disease which require ongoing medical care.

Medical technologies are good for our health but costly

Medical advances give us more access to tests and treatments to help achieve better health outcomes and prevent adverse conditions. But technologies like MRIs, genetic testing, devices and implants are costly, and as new innovations are introduced costs will continue to increase.

Australians pay more for medical devices

Medical device prices in Australia are among the highest in the world. Australians pay $5.5 million every day for medical devices. This is an issue we’re tackling with the government on behalf of our customers to help bring prices in line with other countries and pass those savings on through premiums.

Community rating system makes the system equitable for all

Australian health insurance follows a community rating system which means that people on the same product, in the same state, pay the same base premium regardless of their claiming history, age or health status. This is unlike most other jurisdictions around the world. Without community rating, individual insurance premiums for those who have health conditions or older Australians could progressively increase until it became unaffordable for those who need cover the most. The government introduced a community rating system to keep health premiums equitable and accessible for everyone.

What can customers do to minimise their costs?

Customers can keep their premiums down by prepaying their annual premium in full, increasing the excess of their hospital policy and regularly reviewing their policy to make sure they’re not paying for things they don’t need.

What is Bupa doing to help ensure customers get value for their premiums?

At Bupa, we understand that we can’t just accept the higher health care bills associated with new technologies and pass these onto customers. That’s why we do everything we can to get our customers the best value for each dollar, encouraging new and innovative ways of delivering more for less. This includes things like supporting more out of hospital care and working with the health sector and government on identifying ways to address inefficient practices and wasteful spending on low value care.

We know health insurance can be complex, so we’ve created a short video series to help address some commonly asked questions. Take a look at more of our Health Insurance 101 content here.