BUPA delays annual premium rise until November 1

Health fund premium rises have surged ahead of inflation but massive savings will affect what you pay. See what it means.

Bupa has become the last major health fund to delay its annual premium rise until November 1.

Annual premium rises normally take effect on April 1 every year but because fewer people have been using their health insurance for surgery and extras health funds have saved so much money they are compensating members via cash backs as well as by delaying premium rises.

Medibank, HCF and NIB had already delayed their premium rises until November 1 and BUPA announced Monday it too would delay its 3.18 per cent premium hike until November 1.

The move will cost the fund $22 million and it has billed it as a “cost of living initiative”.

“Delaying the premium increase for an additional month is part of our ongoing monitoring of Covid-19-related savings and returning value to customers,” Bupa Health Insurance Managing Director Chris Carroll said.

“With high household grocery bills, petrol and power prices, we know delaying our members’ premium increase will help ease some of the pressure on household budgets, while giving them assurances they can make full use of their health insurance policy,” he said.

The premium rise delay means the fund has returned a total of $640 million to customers as part of its Covid-19 support, including its latest cashback of $155 million which will be returned to customers from October.

Chris Carroll Managing Director, BUPA Private Health Insurance. Picture: Supplied

Last month the fund announced a cash handout of up to $118 per policy in October to compensate members for the fact fewer operations and extras services were carried out due to Covid-19.

Members will receive payments of between $16 and $118, depending on their policies. Customers living in New South Wales and Victoria, who were less able to use hospital and ancillary services due to extended Covid-19 restrictions, will receive a higher share of the return.

Data out last month showed money held by all the health funds almost doubled to $2 billion as Covid surgery bans slashed the number of operations taking place in private hospitals.

Insurers paid out $700 million less for hospital treatments in the year to March 30 and $247 million less for extras like dental and optical, the latest government data shows.

Nearly 400,000 private hospital surgeries did not occur during the pandemic saving health funds money. Picture Getty Images

The Australian Private Hospitals Association CEO Michael Roff revealed that since the start of the pandemic, more than 390,000 anticipated admissions expected in private hospitals did not occur.

At the same time, as they paid out less, health funds premium income surged by $1.4 billion as they took on new members who were trying to avoid lengthening queues for surgery in overstretched public hospitals.

Insurers promised not to profit from Covid-19, and since the pandemic began in 2020, they have returned some of the savings via lower premium rises, cashback payments and delayed premium payments to those in financial hardship.

The Australian Competition and Consumer Commission (ACCC) has criticised them for being tardy in returning the full amount of the profits they made.

“We expect insurers to return all benefits from procedures that were not performed and are not expected to be performed later. This may be particularly applicable to extras treatment and geographic areas that were subject to extended lockdowns,” ACCC Deputy Chair Delia Rickard said last year.