When it comes to private health insurance, it’s really important to remember that no member can be treated differently or penalised on the basis of their health or claims history.
It’s a common misconception, but unlike other kinds of insurance, the price you pay is not dependant on your claims history or health conditions. The Community Rating system means your claims history has absolutely no influence on the price of your health insurance.
Fair for everyone
David Brajkovic, Executive General Manager, Australian Unity Private Health Insurance, says Community Rating was introduced to ensure fairness, accessibility and affordability for everyone.
“Community Rating means that, irrespective of your age, your health status or how often you claim, everyone pays the same for the same product,” he says. “You can’t be penalised because of chronic health issues. It doesn’t matter how old you are.”
This stands in stark contrast to other types of insurance that are risk-rated, such as life insurance, income protection, or car insurance policies, which have factors such as your age, or your record of claims, taken into account when determining the cost of your cover.
The same cost for the same product
Community Rating ensures that everyone pays the same base premium for the same product.
So, if you have a history of health-related issues, you won’t ever have to pay a higher base premium. Community Rating means that private health insurance is available to everyone, and that everyone is entitled to purchase private health insurance at the same price, regardless of whether you have any health conditions (Lifetime Health Cover loading excepted).
It doesn’t matter if you’re 25 or 75, you’ll pay the same base premium for the same health insurance product.
The importance of Community Rating
The Community Rating system maintains a fair and equitable structure for everyone. It also means private health insurance providers – including Australian Unity – reduce the load on the public healthcare system.
It’s also important for everyone to remember that disclosing your health status will not affect your base premium. However, waiting periods do apply for pre-existing conditions.
“It alleviates some of the cost on the public health and hospital system,” David says. “We need younger healthy people in the system to help fund those that need to use their insurance. And that’s the philosophy of the system. You stay in the system, you all pay the same, and eventually your time will come when you need to claim.
“Often people are reluctant to disclose their health status, thinking that their premiums will go up, but that’s not the case. By disclosing your health needs or conditions, we can most importantly ensure you have the right level of cover for your future health needs and also identify potential eligibility for one of our health coaching programs that we have available to support members in managing their ongoing health needs.”