Australia’s private health insurance (PHI) is based on a system of community rating which means that everyone pays the same premium for their health insurance and health funds are prevented from discriminating against members based on health status, age or claims history.

This contrasts with other types of insurance such as car and life insurance which are risk rated and influenced by factors such as your driving record, age etc.

Community Rating was developed by the Australian 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.

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 health insurers.

PHI’s community rated system, is designed to keep the PHI system fair for all Australians and is instrumental in helping Australia achieve its internationally renowned healthcare system.

This means private cover is accessible to anyone who needs it regardless of health status, and enables private health insurers to help take the burden off the public healthcare system.