Government reforms to private health insurance introduced on the 1st of April 2019 now see younger people eligible for a discount on their private health insurance hospital cover. Legislation previously prevented health insurers from offering discounts to people based on their age.
The Government's decision to allow private health insurers to offer discounts to younger Australians aims to encourage more young people to take out private health insurance, a move that we have welcomed.
The provision of discounted products by insurers is voluntary but we have taken the opportunity provided by this legislative change to offer the discount to all eligible people, across all of our hospital products. These discounts are referred to as agebased discounts.
What policies is this discount available on?
Under the reforms, an insurance policy must not provide an age-based discount unless the policy covers hospital treatment. This means that hospital only or hospital and extras package covers are the only products eligible for the discount. It is not available for a stand-alone extras cover. As stated above, all of Territory Health Fund’s hospital or hospital and extras packages provide this discount to younger people.
How much is the discount?
Insurers are able to offer premium discounts of 2% per year that a person is under 30 years of age, when they first purchase insurance on an age-based discount policy,* to a maximum of 10% for 18-25 year olds. The discount rates are shown below.
|Person's age when they become insured under a hospital policy offering the discount||Percentage discount that insurer may offer|
As a transitional arrangement for our existing policy holders, the entitlement will be based on their age when Territory Health Fund first introduced age-based discounts to their product. For example, an existing Member who was 28 on 1 April 2019, and holding an agebased discount policy with us on this day would receive a 4% discount, even if they first purchased their hospital cover with us when they were 26 years old.
How much is the discount?
The age-based discounts on hospital cover premiums are based on a person’s age when they purchase a policy that offers these discounts (for existing Members this will be their age when Territory Health Fund first introduced age-based discounts on their policy).
Elegibility to the age-based discount is based on a policy holder’s discount assessment date. This date is critical for establishing the discount that applies to a person. This discount assessment date can be established in three ways:
(a) The date the person became insured under an age-based discount policy, or
(b) The date the person was first eligible for an age-based discount if the policy they purchased introduces an agebased discount at a date after the person became insured, or
(c) If a person transfers from a policy to a new policy which is stated to be a retained age-based discount policy, the person’s discount assessment date under the old policy applies
What if I transfer to Territory Health Fund when I am already eligible for an age-based discount?
If your previous health fund informs us that the policy that you held was an age-based discount policy and you transfer to any of Territory Health’s retained age-based discount policies* within 63 days of terminating your previous cover you will retain the applicable discount percentage applying to your previous cover at the time of transfer.
How long do I retain my discount for?
If as an eligible person^ you stay covered under an age-based discount policy you will retain the discount applicable to your discount assessment date until you turn 41 years of age. This is subject to you remaining on the same policy (and that the Fund continues to provide age-based discounts on this product) or subsequently transferring to another retained age-based discount policy. On turning 41 years of age the discount reduces by 2% per year for each year until you are 45 years of age, when the discount will no longer apply. The table below demonstrates this.
|Person's age||Phase out|
|41||Person's base percentage less 2%|
|42||Person's base percentage less 4%|
|43||Person's base percentage less 6%|
|44||Person's base percentage less 8%|
|45 or older||zero|
^ In relation to an age-based discount policy, an eligible person is a person to whom a discount applies in accordance with their discount assessment date.
I am still covered under my parents cover; will the discount apply to me?
The age-based discount does not apply to a Dependent child or adult Dependent still covered under their parent/s or guardian/s family policy.
What happens if it is a couple or family policy?
On a couples or family policy the total age-based discount that applies under an age-based discount policy is equal to the sum of the applicable discount to which each eligible person who is insured under the policy is entitled for that period, divided by the number of adults.
e.g. Sally and Jack have a couples age‑based discount policy together. Sally has a 6% age-based discount; Jack has a 10% age-based discount, the applicable discount for the total policy while both adults remain covered would be 6%+10%=16%/2=8%.
Any Lifetime Health Cover loading or alternatively any other discount (e.g. corporate discount) is not taken into consideration when calculating an age-based discount policy premium.
A retained age-based discount policy means an insurance policy that is not only an age-based discount policy but also states that it is a retained age-based discount policy. Persons transferring to a retained age-based discount policy from another age-based discount policy will retain their discount assessment date that applied under the old policy, and consequently the applicable discount percentage applying at the time of transfer. (If a person transfers to a third or subsequent policy they retain their discount assessment date and applicable percentage, as long as each successive policy is stated to be a retained age-based discount.
All Territory Health Fund hospital covers are retained age-based discount policies.