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How are premiums increases calculated?

by CBHS Corporate Health | Jan 25, 2018
Rate Rise FAQ 2018

Why is CBHS Corporate Health increasing its premiums?

Like all health funds, CBHS Corporate is required to review premiums each year to ensure we continue to reflect the cost of providing quality cover. Following our most recent review, there will be a premium increase on your health cover. This increase has been approved by the Australian Government as being appropriate, considering many factors including rising health costs.

CBHS Corporate seeks to limit the impact of these cost pressures by continually looking for ways to operate efficiently so that we can return higher levels of benefits to our members.

The Government’s Private Health Insurance reforms package is supposed to help affordability, why are my premiums still increasing?

The Government’s Reform package has addressed affordability in several ways. Some may take time to filter through to the end consumer, for example lowering the cost of protheses and removing benefits for some natural therapies from Extras cover.  Other ways members can make their premiums more affordable commencing from 1 April 2019 include increasing their maximum excess ($750 for singles and $1,500 for couples or families) payable on some Hospital covers or by being eligible for a discount of up to 10% on Hospital cover for 18 – 29 year olds.

If you would like to discuss your options, please contact Member Care on 1300 586 462.

How are premiums increases calculated?

Premium increases are calculated by analysing claims and service cost data from previous years.  From this analysis we then can estimate the amount required to cover these costs in the coming year.  Premiums are then adjusted on a product by product basis.

Your final premium will be calculated using a combination of the product’s increase, any discounts, your Lifetime Health Cover loading and your Australian Government Rebate on Private Health Insurance. 

Each year CBHS Corporate submits proposed premium increases to the Minister of Health’s office and the Australian Prudential Regulatory Authority (APRA) for approval. Both the Minister and APRA are required to sign off on all premium increases.

Why are premium % increases going up slightly more than the industry average?

CBHS Corporate has delivered consistently low premium increases for the past three years in a row whereas some health funds have delivered two years of high premium increases prior to this year.

Unlike some of our competitors, we have elected to not remove or reduce benefits for the vast majority of our members. Despite this, we have delivered a premium increase that ensures CBHS Corporate can continue to best serve our members, in both the short term and long term.

When will I be notified of my new premium?

We will notify you of your new premium by letter or email by late February.

Why has my premium gone up even though I haven’t claimed?

Your premiums increase even when you don’t claim because they aren’t based on your personal claiming behaviour.  Private Health Insurance in Australia is community rated, which means premiums aren’t determined based on your specific gender, lifestyle or pre-existing conditions.

Why have my premiums increased more than inflation?

Australia’s health industry is experiencing growth in claims costs and CBHS Corporate is no exception; particularly in relation to hospital and medical services.

Some factors leading to this rate increase include:

  • Increased medical practitioner rates and charges.
  • The cost of new medical equipment and technology (including the increasing number of new and effective but expensive procedures and medical appliances) available through private hospitals.
  • The increased cost for orthopaedic, cardiac, respiratory and obesity related services.
  • As we live longer and more procedures become progressively available, trends like this are usually expected.

Why are my premiums increasing but my benefits aren’t?

At CBHS Corporate we pride ourselves on actively listening to our members and this feedback has increasingly focused on the affordability of private health insurance, with members seeking a better balance between benefits provided and the cost of their insurance. The decision to maintain benefits on most CBHS Corporate policies reflects this feedback and will assist to keep the 2019 increase in premiums as low as possible for all members.

Why should I continue with CBHS Corporate?

CBHS Corporate’s premiums are generally already below those of our major competitors, yet we provide outstanding returns and higher per service benefits. CBHS Corporate is also committed to continuing to provide our members with great customer service.

When was the last rate rise?

The last rate rise occurred on 1 April 2018.

When will the rate rise come into effect?

The rate rise will come into effect on 1 April 2019.

Why is health insurance important?

We strongly believe that the health of every Australian should be a priority no matter how old you are or what your current life stage is, whether it be single, married, starting a family or retired. Private health insurance allows you to take control of your health both by proactively taking steps to be healthier every day and in times of need when you or a family member requires medical assistance. You never know when you or a loved one may need health related services, CBHS Corporate is here to assist you as much as possible.

I pay annually; will I be affected by the rate rise?

Yes, when your paid-to date expires, the new rates will apply. Importantly, if you are aged 18 – 29, aged based discounting will apply from 1 April, 2019.

I pay in advance, what happens to my membership?

For all members who have paid in advance, your current paid-to-date will remain unchanged. Your rate is protected for the period that your membership is currently paid to. From 1 January 2019, members will be able to pay contributions in advance for a maximum of 12 months. 

I can’t afford this contribution, what can I do?

There are several options you can consider:

Claim the Australian Government Rebate on Private Health Insurance: If you are not claiming it already and are entitled to it, you can reduce your regular contribution by claiming the Rebate as a reduced premium. To find out the level of rebate you may be entitled to visit

Select a Hospital product with an excess: You can consider taking on an excess if you don’t have one. An excess is amount that you agree to pay towards the cost of hospital treatment, in exchange for lower premiums.

Change your level of cover: You can consider decreasing your level of cover with CBHS Corporate. Contact our friendly team on 1300 586 462 (Monday to Friday 7am – 7pm AEDT) to discuss your options.

Members aged 18 – 29: From 1 April 2019, the Government will allow insurers to offer discounts to young Australians of up to 10 per cent.  These discounts will be applied to all eligible members accounts from 1 April 2019. 

Why is my rate less / more than rates in other States / Territories?

Hospital cover: Hospital systems are regulated differently in each State and have different costs. The contribution rate you pay reflects these differences.

Extras cover: Charging and claiming patterns differ between States. In NSW, the higher contribution rate reflects these differences.

Can you tell me more about the Australian Government Rebate on Private Health Insurance?

In addition to the base premium increase, the Government announced in 2014 that it would decrease, annually, the percentage of the Australian Government Rebate on Private Health Insurance (Rebate). This results in an increase to the amount of your contribution each year. 

When the Government made this change, it meant that its contribution to an individual's private health insurance rebate would be indexed annually by the lesser of the Consumer Price Index (CPI) or the actual average increase in the premium charged by insurers.

The Australian Government Rebate on Private Health Insurance is income tested which simply means that a person’s eligibility for this rebate is determined by their level of assessable income for Medicare Levy Surcharge tax purposes.  If your adjusted taxable income is over the defined tiers then the amount of rebate you receive may be reduced (or removed completely). If you haven’t nominated your tier, we encourage you to do so as soon as possible. You can nominate a rebate tier by logging in to the CBHS Corporate Member Centre and selecting Manage My Rebate under the My Account menu.