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Why was my first payment more than I was quoted?
Why was my first payment more than I was quoted?

Health cover is paid in advance, here's why that first payment might be slightly higher

Updated over a week ago

All health insurance is paid for in advance, meaning that as a one-off, the first payment with certain health funds may be slightly higher than your initial quote, however subsequent payments should be as quoted.

There are a few reasons that this might happen:

  • Some health funds request at least one month upfront on the first payment.

  • Other funds request one extra day's payment to ensure that there is always credit on your account even on direct debit days.

  • If you have chosen to start your policy before your first payment, your first payment will include the days between the start date and the first direct debit plus your normal frequency

  • If you're new to Medicare, lifetime health cover loading^ will applied to your health premium until your new health fund receives a Medicare Registration Date Letter. Upon receipt of your Medicare Registration Date Letter, any historical loading applied to your premiums will be applied as a credit to your account. Simply request your letter by contacting Medicare through Service NSW, or visiting your local Medicare/Service NSW branch, and provide a copy to your new health fund.

Given the above, here are some examples of how that might look:

EXAMPLE 1:

A member wants to pay their health insurance premiums fortnightly.

The start date of their policy is the 1st of May, with first payment being made on the 1st of May.

BUPA

AHM, HCF and NIB

Other funds*

First payment date

1 May

1 May

1 May

First payment amount

One month

15 days (14 days in advance, plus an extra day)

14 days

Subsequent payment amounts

14 days

14 days

14 days

EXAMPLE 2:

A member wants to pay their health insurance premiums fortnightly.

The start date of their policy is the 1st of May, with first payment being made on the 5th of May.

BUPA

AHM, HCF and NIB

Other funds*

First payment date

5 May

5 May

5 May

First payment amount

One month

20 days (5 arrears days, plus an extra day)

19 days

Subsequent payment amounts

14 days

14 days

14 days

EXAMPLE 3:

A member wants to pay their health insurance premiums monthly.

The start date of their policy is the 1st of May, with first payment being made on the 1st of May.

AHM, HCF and NIB

Other funds*

First payment date

1 May

1 May

First payment amount

1 month and 1 day

1 month

Subsequent payment amounts

1 month

1 month

EXAMPLE 4:

A member wants to pay their health insurance premiums every 6 months.

The start date of their policy is the 1st of May, with first payment being made on the 1st of May.

AHM, HCF and NIB

Other funds*

First payment date

1 May

1 May

First payment amount

6 months and 1 day

6 months

Subsequent payment amounts

6 months

6 months

EXAMPLE 5:

A member wants to pay their health insurance premiums every month.

The start date of their policy is the 1st of May, with first payment being made on the 1st of May.

AHM, HCF and NIB

Other funds*

First payment date

1 May

1 May

Payment amount without Medicare Registration Date Letter

1 month and 1 day, with LHCL applied^

1 month, with LHCL applied^

Subsequent payment amounts once Medicare Registration Date Letter prodivded to fund

1 month, using credits from previously paid LHCL until credit has been depleted^

1 month, using credits from previously paid LHCL until credit has been depleted^

* Other funds refers to any fund on Compare Club's current panel, who has not previously been mentioned within the same table. We compare selected products from a panel of trusted insurers. We do not compare all products in the market. To view the current funds on our panel, see any fund with a green tick listed here: https://compareclub.com.au/health-insurance/companies/

^ Lifetime Health Cover Loading can be completely waived if the member takes out hospital cover within 12 months of joining Medicare. In this instance, the previously paid loading will be corrected to the relevant age-based loading for the member, and any additional loading above that, paid by the member prior to providing the Medicare Registration Date Letter to their fund, will be used as credit towards future premiums. If the member does not maintain continuous hospital coverage ongoing, the relevant age-based loading for the member will apply to any future policies.

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