The concept of trying to get back what one puts in every year is new and a symptom of what is wrong with the current direction of the system. The way it was supposed to work was that I pay an annual premium based on actuarial estimates that would ensure the premiums will on average cover the medical liability over ones life. For example if I have paid premiums for say 40 years the premiums set would take account that ones claims on average when one is younger will be far lesser than the premiums paid at that time. Under such a system it should enable a competent provider to have the funds to pay the costs associated with greater health problems in old age.
Private health insurance core cover is for hospital treatment. I for instance have never been in a hospital despite my senior status so the fund would have accumulated an enormous excess premium funds from myself. However, what I find is my insurance premium rising above the inflation rate in spite of the fact that the fund has made a fortune out of me. Its become a bit of a rort with new products and encouragement to expend on more pairs of glasses than one needs etc. On top of that if one does go to hospital you can be certain that out of pocket expenses will usually arise sometimes large amounts.
A pensioner may have contributed top dollar all their working lives expecting all the money they never claimed in earlier years would be used in latter years when needed. The premium should never be based just on what the expected outlays will be in a given year. The funds should have surpluses over time that are invested so as they can keep premiums down and have contingency funds to cover years when due to the ageing population or health epedemics more money will be needed. Instead they are taking a short term view and in fact with most funds going private with shareholders, the excess funds are in fact going to the shareholders not to the fund insured. This privatisation has basically killed off the old not for profit funds which also included the govt’s own medibank private.
Because of the many private insurers the remaining not for profit ones are still expensive because they no longer have the economies of scale to have lower premiums.
So getting back to the pensioner who may have paid a fortune in premiums throughout their life, if premiums going up far too high gives them no option but to withdraw, what a disgrace that during their time of need all the money they contributed over the years for hospital cover would no longer count and they would become uninsured.
Its become a disgrace of a system.
