18 May COVID surpluses to benefit policyholders of not-for-profit and member owned health funds
Over 3 million Australians who have private health insurance with a Members Health fund will benefit in the form of reduced premiums and better health benefits should unexpected COVID-19 surpluses materialise.
Members Health Fund Alliance CEO, Matthew Koce said that funds owned and run by members for members, will pass on any financial gains from postponement of elective surgeries and extras medical procedures to policyholders.
“Because they are not-for-profit or part of a member-owned group, Members Health funds don’t serve shareholders or overseas investors. That means, as a group, the Members Health funds return more of the premium dollar back to policyholders and operate on narrower margins. Any profits generated above what the fund needs to operate, goes back to the members through lower premiums and better health benefits,” said Mr Koce.
Danielle, 32, works two part-time jobs and is one of the 3.7 million Australians with a private health insurance fund that puts ‘people over profits’.
“I’ve always had private health insurance. My father is a former employee of the Commonwealth Bank, so we have always been with CBHS,” said Danielle.
“In the space of 48 hours in March, I lost both my part-time jobs. My whole income was instantly gone due to COVID-19 restrictions. I have a medical condition that requires regular chiropractor visits and surgeries every couple of years, so giving up my private health insurance wasn’t an option,” she added.
“Certainly, there was a moment of panic. I had some backup savings, but we didn’t know how long this would go for. And I knew that if I kept using my savings, it was eventually going to run out.
“My health fund had contacted me about financial hardship options for members. I applied and that same evening received an email saying I had been approved. This meant that I had three months of premium relief, with the possibility of extending this for another three months if my situation is still impacted then. I had been so stressed that I just burst into tears. It was a massive relief.
“If I didn’t have private cover, I would have to go into the public system where it is generally an 18 to 24-month wait for surgery, even after seeing a doctor.”
Members Health is the peak industry body for an alliance of 27 health funds that are not-for-profit (NFP) or part of a member-owned, regional or community-based group. Some of the funds in the alliance are open to everyone, while others serve important industry groups, such as teachers, police, military families, transport, emergency services, doctors, nurses and health care workers.
NFP and member owned health insurers are bucking the sector’s downward trend, recording year on year growth three times faster than the rest of the private health industry.
“The growth is led by younger people who are increasingly attracted to our member’s health over profit philosophy. Members Health funds give more in the premium dollar back in benefits. That is because they are not listed on the stock exchange or owned by overseas interests. They have a very stable and reliable business model that always puts people first,” said Mr Koce.