Medibank has announced it will return around $105 million in COVID-19 permanent net claims savings to customers through premium relief.
The company said the return brings its total financial support provided during the pandemic to $300 million.
"Approximately 2 million policies will be eligible, and the majority of customers should expect to receive the premium relief by the end of September 2021," said the company in a statement, adding, it will be up to $52 for extras only policies and up to $175 for hospital and extras policies. The relief will be applied automatically.
“Today’s announcement will return around $105 million in COVID-19 permanent claims savings back to our customers via premium relief, recognising that COVID-19 restrictions limited how our customers could use their health insurance," said CEO David Koczkar.
“We’ve been there for our customers to help them navigate through this challenging time, and this give back is just another example of how we are supporting our customers.
“This latest give back is the next phase of our broader Medibank financial support package and customer give back program. Today’s announcement will take Medibank’s total broader COVID-19 financial support package and give back program to $300 million so far.
“We said right from the start of the pandemic that we would not profit from COVID-19, and that we were committed to returning any COVID-19 savings back to our customers because it is the right thing to do. And today’s announcement shows that we have done what we said we would.
“Private health insurers have been required by the industry regulator to hold funds in order to be able to pay for an anticipated catch up in elective surgeries after COVID-19 restrictions were lifted. With the majority of claims normalising we have been able to allocate the excess funding to be returned to our customers.
“This latest phase of our package will be welcomed by our customers, some of who are still doing it incredibly tough as lockdowns continue in various locations across the country.
“We will continue to assess known claims savings and continue to return any savings back to our customers.”
The Australian Private Hospitals Association welcomed the announcement but said health insurers are still retaining significant amounts in their ‘deferred claims liability’.
“At the end of March 2021 there was $1.8 billion of unspent members’ funds sitting in health insurers’ accounts – unchanged from December 2020. While some insurers have made moves to return members unspent funds, too few have done so,” said CEO Michael Roff.
“We have heard some of the large insurers suggest only the not-for-profit funds were in a position to return unspent premiums. Medibank is a for-profit insurer and their actions demonstrate that some insurers are making up excuses not to return cash to their members. It’s time all private health insurers met their obligations to their members. At a minimum, they should publicly declare how much in deferred claims they are holding and outline a plan to pay it back.”