Medibank (ASX:MPL) unveiled its plans to return around $135 million in Covid-19 permanent net claims savings to customers, by deferring next year’s premium increases for five months.
Medibank and ahm health insurance premiums were set to rise by an average of 3.10 per cent from 1 April 2022, which the insurance said is the lowest average premium increase in 21 years. However, it will now be postponed to September.
The five-month deferral of the premium increases will be applied automatically on April 1 to around two million policies for all Medibank and ahm customers who hold an active resident hospital and/or extras policy at any time during the five-month period.
Customers who are no longer active, but held an active resident policy between July and December this year will be eligible for a give-back.
The premium increase deferral is being funded from additional Covid-19 permanent net claims savings since June 30 this year and does not impact Medibank’s operating earnings for the six months to the end of December.
“Customers will save on average around $93 for hospital and extras policies and around $8 on extras policies,” said Medibank chief executive David Koczkar.
“While we know no one likes their premium to go up, healthcare costs are continuing to increase at a rate much higher than general inflation.
“As well, we are managing our own costs. Last financial year we delivered productivity savings of approximately $20 million and are targeting $15 million this year.”
Shares in Medibank (ASX:MPL) are trading 0.3 per cent lower $3.37.