Private Health Insurance Community Rating System
Australia’s private health insurance model, which boasts community rating as one of its key features and represents international best practice. Community rating facilitates affordable access to private health care for all Australians. It means that everyone pays the same premium for their health insurance and health funds are prevented from discriminating against members on the basis of health status, age or claims history.
Under the provisions of the Private Health Insurance Act 2007 in Australia, health insurers are prohibited from charging a premium based on a person’s state of health or history of claiming. This system is called Community Rating.
Community Rating was developed by the Government to make sure that people with a higher level of claims are not disadvantaged – for example, if you have a history of health issues, this does not mean you should pay a much higher premium. Private health insurance is there to cover everyone, whether you have a health condition or not.
Community rating means that everyone is entitled to buy the same product, at the same price, and is guaranteed the right to renew their policy. A health insurer cannot refuse to insure you, or refuse to sell you any policy you may wish to purchase. There are some exceptions to this – for example, you will pay a higher premium if you have a Lifetime Health Cover loading.
For example, a single, healthy 20 year-old and a single, unwell 60 year-old will both pay the same premium for the same cover. However, the cost of premiums for similar cover may vary between insurers.