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Operations Of The Private Health Insurers Annual Report 2006-07

Part B

Operations Review

Membership Statistics

In this report, ‘membership statistics’ refers to the number of:

policies in a health benefits fund
insured persons covered under those policies (coverage).

Health insurance cover is reported in three membership classes:

hospital treatment only
a combination of hospital treatment and general treatment
general treatment only.

The general treatment membership class was introduced on 1 April 2007. General treatment replaces what was formerly known as ancillary treatment and covers non-Medicare services, as ancillary treatment did. In addition, general treatment covers hospital-substitute treatment and chronic disease management program treatment.

Hospital treatment and general treatment memberships are categorised by family type: single, couple, 2+ persons no adults, single parent, family and 3+ adults.

Hospital treatment membership is further classified by whether the product has exclusions and whether the product is subject to an up-front excess.

PHIAC statistics can only identify policies which have a combination of hospital treatment and general treatment cover with the same fund. It is possible for an insured person to have hospital treatment cover with one fund and general treatment cover with another and this would appear as two separate policies in the statistics.

Table 1 on page 36 shows detailed membership statistics within the classes of health insurance. At 30 June 2007, there were a total of 4.368 million policies with hospital treatment insurance, covering 9.145 million insured persons, or 43.5% of the Australian population. The total number of policies and insured persons with general treatment cover (which may or may not be combined with hospital treatment cover) was 4.599 million and 9.737 million respectively. The total number of insured persons with any form of health insurance in Australia at 30 June 2007 was 10.562 million, or 50.3% of the population. However, these insured persons were covered by a wide range of insurance, from ambulance only or general treatment only cover, through basic hospital treatment with exclusions and excesses, to top hospital treatment and general treatment combined cover.

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Hospital treatment cover

Hospital treatment insurance provides cover for accommodation and medical charges for inpatients of public hospitals, private hospital and day hospital facilities. Hospital treatment policies may also include cover for hospital-substitute treatment from 1 April 2007.

Between 30 June 2006 and 30 June 2007, insured persons covered for hospital treatment increased by 298,634, or 3.4%, to reach more than 9.145 million.

Statistics in relation to changes over the year in insured persons with hospital treatment only and general treatment must be interpreted with caution. Large changes in the June quarter of 2007 mostly reflect changes in definition. The large decrease in the number of insured persons with hospital treatment only, and accompanying large increase in the number of insured persons with general treatment, is the result of policies previously defined as hospital only changing classification to hospital and general treatment combined. Hospital only policies that included a component of ambulance cover were re-classified from 1 April 2007, to hospital and general treatment. Trends over the year to 31 March 2007 show a decline in persons with hospital only cover of 40,000 and an increase in insured persons with hospital and ancillary combined policies of 262,000.

There were increases in total hospital treatment coverage in all states. Changes in the percentage of insured persons covered, by state, between 30 June 2006 and 30 June 2007 are:

New South Wales and Australian Capital Territory (0.6 percentage points)
Victoria (0.8 percentage points)
Queensland (1.0 percentage points)
South Australia (0.6 percentage points),
Western Australia (1.3 percentage points),
Tasmania (0.8 percentage points),
Northern Territory (2.1 percentage points)

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Figure 1 below shows the trend over time in the percentage of the population with hospital treatment insurance, highlighting factors that affected the demand for hospital treatment cover.

Figure 1. Insured persons covered by hospital treatment insurance
30 June 1971 to 30 June 2007

Figure 1. Insured persons covered by hospital treatment insurance30 June 1971 to 30 June 2007

Hospital treatment cover, age 64 and below and 65 plus

The percentage of the population covered is affected by the demand from different age categories for health insurance. This is illustrated by the trend in insured persons covered aged 64 and below and 65 and over. Insured persons aged 65 and over have trended upward, increasing by 61,214, or 5.3%, during 2006–07. Following an initial large increase in the number of persons covered aged 64 and below in 2000 as a result of Lifetime Health Cover, following years saw these numbers fall. Increases in the past two years have seen the number of persons covered aged 64 and below exceed the high achieved during Lifetime Health Cover. However the proportion of persons aged 64 and below has decreased every year since Lifetime Health Cover. The proportion of insured persons aged 65 and over has increased from 11.3% to 13.3% of total insured persons during the years 2002–2007. This trend indicates an ageing insured population that is correlated with the ageing population.

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