Cash bonanza for members of major health fund

Health funds made a $2 billion profit from Covid and now one of the biggest funds is returning a small amount of the savings to its members as a cash handout – are you eligible?

Health fund Bupa will give its members a cash handout of up to $118 per policy in October to compensate them for the fact fewer operations and extras services were carried out due to Covid.

But the money will go into 3.4 million members’ bank accounts at the same time as the fund charges a rise in premiums of around 3.18 per cent.

The largest ever cashback by the fund brings to $618 million the total amount of money Bupa has returned to members as a result of Covid.

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.

“Australians are facing increasing cost of living pressures, so we know every dollar makes a difference to household budgets. This is not just about doing what we said we’d do but doing it in a way that’s best for customers,” Bupa Health Insurance Managing Director Chris Carroll said.

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

Along with three other big health funds, Bupa delayed its annual premium rise by six months from April until later in the year.

It claims the delayed increase was worth another $146 million for its customers.

To be eligible for the cashback you must be an Australian resident who had private health cover with Bupa for a minimum of three months between 1 July 2021 and 30 June 2022.

It excludes ambulance only and overseas visitors and students.

The money will be deposited in the same bank accounts as the previous cashback.

“I encourage our customers to ensure their details are up to date so they can receive their cashback as quickly as possible,” Mr Carroll said.

Health funds gained hundreds of thousands more members and paid out nearly $1 billion less in benefits during Covid as they were one of the few parts of the health system to profit from the pandemic.

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.

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.

Health funds made a $2 billion profit as surgeries were cancelled during Covid. Picture iStock

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, 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.

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