Shop around for health fund discount: minister

Consumers should shop around for a health insurance fund that offers the government’s youth discount, says the Health Minister.

Australians not offered a youth discount on health insurance have been told to shop around for a new fund, after it was revealed some insurers won’t pass on a Morrison government reform aimed at keeping young people in the system.

Not-for-profit funds HCF and HBF are among the insurers not introducing a youth discount to members, while others have decided to only implement it to some policies.

The country’s biggest insurers, Medibank, Bupa and NIB, have committed to introduce the discount to all members aged between 18 and 29.

A spokeswoman for Health Minister Greg Hunt said the youth discount was part of a package of reforms introduced by the government to make private health insurance simpler and more affordable.

“The government encourages private health insurers to offer this to all eligible members and encourages consumers to shop around if they are not being provided the discount from their insurer,” the spokeswoman said.

HCF said in a statement to The Australian that given there had only been a short period to ­implement the range of private health insurance reforms since finalisation of the package, it was not yet in a position to share details about youth discounts.

But its website told its members that it was not offering the age-based discounts.

It said it was instead launching a new hospital and extras package designed for younger people, which would include treatments they were most likely to claim for and exclude those that were unlikely.

Health insurers have been struggling to attract and retain young people as Australians aged under 30 increasingly question the value of the product.

Over the past five years, the proportion of 25 to 29-year-olds with health insurance has fallen by 15 per cent.

One of the government’s health insurance reforms was pitched at stopping this decline.

From April 1, insurers can choose to offer premium discounts on hospital cover of 2 per cent for each year that a person is aged under 30 when they first purchased hospital insurance, to a maximum of 10 per cent. For a consumer on a $1500 policy the savings would be up to $150 and for a young family on a $3000 policy it would be up to $300.

Medibank chief executive Craig Drummond said Medibank was adopting the voluntary young adult discounts because it was the right thing for customers.

“Approximately 150,000 Medibank and ahm customers will have up to the maximum 10 per cent young adult discount applied to their policy automatically from April 1,” he said.

“This means they will receive a lower premium increase, or even a premium decrease.”

John Van Der Wielen, chief executive of HBF, said while the option to introduce the youth discount was welcome, the insurer was working hard to make health insurance more affordable for all its members.

“We would never charge all our members higher premiums to offset the cost of a discount for younger members,” he said.

The head of the Perth-based insurer also highlighted that HBF’s average premium increase from April 1 was 1.94 per cent, which was lower than the industry average of 3.25 per cent.

“We will continue to evaluate the (youth discount) option throughout the year, and if we do decide to offer age-based discounts in the future, it will be in a way that will benefit all our members,” Mr Van Der Wielen said.

NIB said it would roll out the discount to all new and existing customers.

Managing director Mark Fitzgibbon said the entire industry needed younger people in the system to support its long-term sustainability.

Dwayne Crombie, head of Bupa’s health insurance arm, added that the more under-30s who took up health insurance annually, the better it was for all health insurance customers, as it helped keep premiums lower.