Nib’s ‘insulting’ offer to members slammed after health funds make $1.8bn during Covid

Health funds pledged to return cash to members after making $1.8bn during Covid, but nib’s offer is far less generous compared to its competitors.

Exclusive: Consumers and health industry players have derided as “an insult” health fund nib’s one off $22 premium reduction to compensate members for the savings it made during Covid.

Almost 600,000 eligible nib members will receive premium relief this month which on average translates to around $22 per policy.

Health funds saved $1.8 billion as a result of last year’s Covid surgery bans and drop off in demand for extras services.

They promised not to make a profit from the savings but it has taken over a year for the funds to return any of the cash to their members.

Nib is the third major health fund, after HBF and Medibank, to return money to members.

The amount nib members receive will differ based on the member’s level of cover. Members with Hospital and Extras combined policies will receive up to $64, Hospital Only policies up to $48 and those on Extras only policies up to $13.

This compares to the much more generous premium reductions of up to $175 Medibank and AHM members will receive this month to compensate for Covid savings.

Health fund HBF gave its members cash payments of up to $140 in July to compensate for Covid savings and it also applied a zero annual increase in premiums in April.

BUPA has yet to announce any hand back to its members of Covid savings.

Almost 600,000 eligible nib members will receive premium relief this month which on average translates to around $22 per policy. Picture: NCA NewsWire / Steven Saphore

The medical device industry described the nib hand back as “an insult”.

“nib made a profit of $160.5 million last year, an increase of 84 per cent. A large part of these profits are due to Covid preventing their members from accessing health care,” Medical Technology Association of Australia chief Ian Burgess said.

Medibank Private’s operating profit soared 14.4 per cent in 2020- 21 to $538.6 million, underpinned by a 4.6 per cent jump in membership while claims grew just 1.4 per cent, Mr Burgess said.

“We urgently need a transparent and independent process to ensure Covid profits are returned to members,” he said.

Consumer groups are demanding the independent regulator ensures greater transparency over the profit hand backs to ensure consumers are not cheated.

“It is disappointing that it has taken so long and the returns to members are not as high as expected,” the CEO of the Consumers Health Forum, Leanne Wells said.

“We think APRA (the Australian Prudential Regulation Authority) should monitor this more closely,” she said.

APRA data showed insurers bagged a cumulative net profit of $1.5 billion last financial year, almost double their 2019-20 result, Mr Burgess said.

Medical Technology Association of Australia CEO Ian Burgess said nib made a profit of $160.5 million last year, mainly due to Covid preventing their members from accessing health care. Picture: Supplied

Ed Close, nib chief executive of Australian Residents Health Insurance, said the fund was honouring its promise to return claims savings to members in recognition of the impact of COVID-19 restrictions on their ability to access some health services.

“In line with requirements by our industry regulator, nib set aside funds to ensure we were able to pay for our members’ future healthcare needs as there was an expectation there would be a ‘catch-up’ in claims once COVID-19 restrictions eased,” Mr Close said.

“This anticipated claims experience has not eventuated in financial year 2021, which means we can return $15 million in claims savings to our members.”

Nib members do not need to do anything to receive the Covid credit, it will be automatically applied to their policy and the fund is contacting all eligible members to provide details about their individual Covid credit this month.

Originally published as Nib’s ‘insulting’ offer to members slammed after health funds make $1.8bn during Covid