Australians don’t trust private health insurers

Peter 19 September 2016

Cost health insurance

High costs and poor value to blame for negative perception.

Results of a new study have found more than three-quarters of Australians either strongly agree or agree that "private health insurers put profits before patients", with a similar number considering reducing or cancelling their policy due to a lack of value.

The ReachTEL poll, commissioned by the Medical Technology Association of Australia (MTAA), revealed 77.9% of Aussies believe private health insurers are motivated by money.

Quarterly stats released last month by the Australian Prudential Regulation Authority's (APRA) seem to support these claims. According to the data, health fund premium revenues rose by 6.4% and profit before tax increased by 8.9% in the year to June 2016. However, reimbursements grew by just 5.3%.

Of the 1,144 Australians surveyed, more than two-thirds (69.2%) have considered downgrading or dropping their policy in the last 12 months, citing poor value for money.

This figure was even higher (75.4%) among younger people aged 18-34 years of age.

APRA's statistics reinforce these findings, reporting a slight decline in health fund memberships from 47.4% to 47.0% in the year to June 2016.

A high percentage (67.5%) of survey respondents were also against the ability of private health insurers' to limit the types of medical devices prescribed for patients. Among those most in need of these devices (people aged 51-65 years of age), opposition rose to three quarters (75%) of respondents.

Last month Private Healthcare Australia CEO Rachel David called on the government to reform health funds' regulated prostheses prices in an effort to help lower insurance premiums.

However, between 2010 and 2015 private health insurance premiums rose by around 35%, while the growth in average benefits paid for medical devices was 0%.

Only a fifth (20.1%) of Australians believe any additional savings would be passed on.

The average cost of medical procedures for Australian hospital patients is often significantly higher than corresponding operation charges in other countries, resulting in pricier health insurance premiums.

Towards the end of the 2015/16 financial year, the number of complaints from Aussies unhappy with their health insurance rose decidedly, relating to issues of administration, membership and service.

When selecting a health insurance fund, you're likely to be worried about costs and which services you'll be covered for; gap payments are something you need to consider.

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