Community Rating – What It Means and What To Do If You’re Refused Insurance
In some countries, if you are older or have health issues, finding health insurance can be difficult, if not impossible. If you do find coverage, it will cost you much more than it would cost a younger, healthier person. In Australia’s private health insurance system, a single, healthy, 23-year-old man and a single, unhealthy, 59-year-old man will pay the same premium for the same coverage. This is because of community rating.
What is Community Rating?
Community rating means that all Australians have affordable access to private health insurance. Everyone pays the same baseline premium for their health insurance and health funds are not allowed to discriminate against members based on age, health status or claims history.
Community rating is very different from the usual method of determining premium payments, which is risk rating. In risk rating, the insurer bases the premium on various risk factors associated with that client. In community rating, the premium is based on risk factors applying to the community as a whole.
The goal of community rating, as set out in the Private Health Insurance Act of 2007, is to ensure that everyone who wants it has access to health insurance and to prevent private health insurers from discriminating between people on the basis of their health or any other reason.
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How Does It All Work?
In Australia, all private health insurers are regulated by the Commonwealth Government under the Private Health Insurance Act of 2007. This means that, by law, all health funds must comply with community rating, meaning you cannot be denied access, refused cover or charged extra for private health insurance, except for a few exceptions. There are some rules about waiting periods, and there is the Lifetime Health Cover rule which is designed to encourage people to start hospital cover early and keep it going long-term.
You have the right to join any private health insurance fund you choose, and you may switch from one fund to another at any time without financial penalty.
What To Do If You Are Denied Health Insurance
Although the goal of community rating is to provide coverage for all at the same price, there are times when a person is denied private health insurance coverage.
One of the most common reasons for denial is if a person has pre-existing medical conditions and doesn’t have the money to pay for the exams and treatment that may be necessary. This may seem contradictory, but if you are denied coverage, you do have other options.
- Contact the Private Health Insurance Ombudsman – this organization is there to help consumers with health insurance questions and enquiries. You may be able to appeal against the decision to refuse health insurance cover or to deny a claim.
- Learn all you can about private health insurance in Australia to fully understand your rights and what you can expect.
- Compare private health insurance policies. Find out whether you have any other choices, compare plans and prices, and make an informed decision about what to do.
Community Rating is meant to help provide quality private health care cover for Australians, no matter what their age or state of health. If you are denied coverage, try not to be discouraged; check your options and don’t be afraid to ask for guidance from a professional.
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