Defence Health has guaranteed to hold contribution rates at their present level despite increases sought and approved for a number of major open health funds.

Their last increase in Defence Health rates was in May 2000 and additional benefits were introduced for the fund's 52,000 members last year.

"We notified our members earlier this year that we would guarantee no premium increase for 2002," said the General Manager of Defence Health, Mr Ron Coghill.

Mr Coghill explained that whether a health fund was able to hold rates at current levels was determined primarily by claims experience.

"Defence Health claims experience, whilst mirroring the industry trend, is at a lower level," he said.

"This combined with our ability to contain administration costs enabled Defence Health to not only hold rates at the May 2000 level, but also introduce new and increased benefits last year."

Mr Coghill said, although Defence Health would guarantee no increase in contributions until December 2002, that rate increases would 'inevitably occur' beyond then because of increased hospital and medical gap claims costs together with increased benefit levels for dental and other services.

He said Defence Health would review their rates at the end of the year and decide whether they need to change and, if so, to what extent.

"The amount and timing of such an increase will be consistent with Defence Health's claims experience and the focus of value for money health insurance will not change," he said.

Mr Coghill said about 50 per cent of Defence Health's membership comprised families of members of the Australian Defence Force, in particular the Army and Air Force.

"It is a restricted membership," he said, "but, apart from serving members of the ADF (including the Reserve), civilian employees of Defence or of an organisation contracted to the Department of Defence can become members of Defence Health."

By Antony Underwood