Major health insurance companies will offer customers up to $620 cashback as a share of pandemic profits

Australians with private health insurance are set to receive $1.6 billion in cashback from five of the country’s biggest providers.

Funds are under pressure to pass on the benefits of the pandemic, having increased last year with deferrals of requests for elective surgery.

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Health insurance providers Bupa, Medibank, CUA, HBF and AIA have all pledged to share their pandemic-related benefits with eligible policyholders.

This will look like cash payments from some providers, as well as deferred premium increases and hardship support.

The surplus these companies have accrued from deferred claims will be deployed this year, with some having already distributed the surplus to members.

A 2020 report from the Australia Institute argued that restrictions on non-emergency elective surgeries during the pandemic would likely result in “windfall” profits for health insurers.

A former head of the private health insurance administration Council Shaun Gath called the government at the time to step in and “oversee the return of all profits to customers, to ensure that this actually happens and is done fairly”.

Here’s everything you need to know.

BUPA

BUPA will offer a total of $155 million in cashbacks.

Am I eligible?

You are entitled to a refund if you have been a member of the fund for at least 90 days between July 1, 2021 and June 30, 2022.

Even if you’ve since canceled your membership, you’re still eligible for payment if you were a member during that time.

You will also need to hold an Australian resident policy to be eligible.

Overseas visitors and students, and members with ambulance-only coverage, will not be eligible.

How much and when will I be paid?

The fund will use the bank details indicated on your account and will start depositing the sum from October 2022.

The amount of cashback depends on the policy you hold with the fund.

  • Surcharges only: between $16 and $44 per policy
  • Hospital only: between $42 and $118 per policy
  • Hospital and extras: between $58 and $162 per policy,

BUPA will attempt to contact customers saying: “You will receive a communication from us indicating the amount you will recover.

“We are committed to returning any money we have saved from unused claims or other impacts of COVID-19.”

Reimbursement amounts will vary from state to state, depending on the severity of the region affected by the pandemic.

“We recognize that customers in NSW and VIC, due to strict government lockdowns, have been more significantly affected in their ability to use their policy.”

Medibank

Medibank made an annual net profit of $441.2 million last year as of June 30.

In February, its health insurance profit rose 10.3% to $280.9 million on the back of premium income growth of 3.8% to $3.5 billion.

It’s unclear exactly how much of that profit will be shared with policyholders, but cash payouts from the fund are included in a $682 million support package.

Medibank’s share of pandemic profits will be offered in the form of an extended pause on premium increases, in addition to certain reimbursement sums for eligible customers.

The bounty break has now been extended from October to November.

Am I eligible?

You are entitled to a refund if you held a hospitalization or extras policy between January 1, 2022 and June 30, 2022.

You are not eligible if your policy was Ambulance Only Coverage, Overseas Visitor Coverage, Overseas Worker Coverage and Overseas Student Health Coverage.

How much and when will I be paid?

The fund simply indicates that the cashback payment will be made using the bank details indicated on your account during this year.

This cash back amount is based on the type of coverage you have and how long you have been an active member of that policy.

  • Surcharges only: approximately $28 per policy
  • Hospital only: approximately $90 per policy
  • Hospital and extras: approximately $123 per policy

If Medibank does not have your bank details, you will benefit from free coverage days up to their equivalent value.

HBF and AUC

Insurance company HBF acquired CUA Health last year, so the companies’ commitments are largely the same.

HBF calculated a $42 million surplus from deferred claims to be returned to members.

HBF has already paid 410,000 eligible policyholders who held a contract between March 25, 2020 and June 30, 2020.

He paid extras only for $20 policies and family policies with hospitals and extras up to $140.

“We led the way by being the only major fund to completely reverse our 2020 premium increase and the first to pay cash back to our members last year, worth nearly $80 million combined” , HBF told 7NEWS.com.au in a statement.

“Particularly since the start of 2022, we have identified a pattern in our claims, which varies by state, that suggests there will be an amount to be returned to members, most likely through a deferral of increases rate.”

AUC also identified a surplus of $3.7 million and paid just over 41,100 policyholders in December last year.

“When we acquired CUA Health last month, one of the first orders of business was to prioritize paying out COVID-19 savings for our new members,” Van Der Wielen said.

The CUA announced in March 2021 that it would provide cash back to eligible members who held policies in 2020 between March 25 and June 30.

Payouts also ranged between $20 and $150 per policy, depending on coverage.

AIA

AIA Health Insurance has offered refunds on additional premiums paid in August last year, less any claims made between January 1 and December 31, 2021.

Members who were part of the AIA Vitality program were also able to receive a refund ranging from 50-100% of their membership.

AIA claimed at the time that total refund amounts would be calculated in early 2022 and returned directly to members.

“While not a ‘profit sharing’ initiative, the initiative offers refunds on premiums paid for extras minus any claims during the year,” AIA told 7NEWS.com .to.

Now they are bringing back cash payments.

“With an overwhelmingly positive response and continued challenges due to the pandemic, we have brought it back for a third year in 2022, with cash back to eligible members paid out in early 2023,” AIA told 7NEWS.com. to.

Kristan F. Talley