Printable version of PHI 29/10 (PDF 28 KB)
12 May 2010
Lifetime Health Cover Mailout: Fee for Service Cost Recovery – Budget Measure 2010
This circular provides information about the 2010 Budget Measure to continue the private health insurance Lifetime Health Cover mailout.
Lifetime Health Cover mailout
Since its commencement in July 2007, the Lifetime Health Cover (LHC) mailout has had a very positive effect in supporting private hospital insurance membership, with a 10.4% increase in the number of 30 to 34 year olds taking out private hospital cover since the mailout began. The mailout encourages people to think about taking out insurance at a stage in their lives when they are less likely to be aware of the benefits of private health insurance.
Budget Measure 2010
As announced in the 2010-11 Federal Budget, the Government will continue to carry out the LHC mailout. However, from 1 July 2010, the cost of the LHC mailout will be recovered from private health insurers through the application of a fee for service arrangement.
The LHC mailout will continue to use personal information held in the Medicare Australia database. People selected for the mailout will be those individuals approaching their LHC deadline, that is, people who have had their 31st birthday in the preceding financial year who do not have private health insurance, and newly registered migrants. The use of this personal information is authorised for the purposes of the LHC mailout under section 5(1)(d) of the Medicare Australia Act 1973.
The mailout alerts these consumers that they are approaching their LHC deadline and that they will incur a financial penalty if they choose to take out private health insurance hospital cover in the future after their LHC deadline has passed.
Fee for Service Calculated on Market Share
The total cost of the LHC mailout is estimated at around $558,000 per annum, with the costs to be shared equitably across insurers based on market share of SEUs. Data used to calculate market share will be the most up to date information available from PHIAC following the mailout.
Further information about the Lifetime Health Cover Budget measure is available in the Government Budget papers 2010-11, or online on the Australian Government's Treasury website
If you require further information please telephone: (02) 6289 9853/24 hr answering machine or email the enquiry to Private Health Insurance Branch
For more information visit 2010 Private Health Insurance (PHI) Circulars
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