'Carrot and stick' plan to get the young covered
COMMUNITY rating has protected older people from having to pay higher private health insurance premiums.
Although older people are more likely to make a claim, it means the level of risk a consumer poses to an insurer does not directly affect the premium.
Younger people end up compensating by paying a higher rate than their expected level of claims would necessitate, given their generally healthier wellbeing. Older people typically pay premiums lower than the risk associated with their cover would require.