Consumers unhappy with the state of health insurance

Richard Laycock 29 March 2017 NEWS

Confident young beautiful woman working on laptop and talking on the mobile phone while sitting at her working place

Spike in complaints as membership growth stagnates.

Complaints to the Private Health Insurance Ombudsman (PHIO) rose for the third straight year, according to the latest PHIO State of the Health Funds 2015-16 report.

The report found that complaints were up 3.54% year-on-year and we up a staggering 57.45% since 2010.

Last years complaints were buoyed by membership (administration) issues and service problems. To combat the growing number of complaints, the PHIO has worked with the funds that generated the highest number of complaints in an attempt to address consumer concerns.

This growing unhappiness with health funds could explain the stagnation in those looking to take out cover. The report found that three of the funds with a national market share of above 0.5% experienced decreases in their membership in the 2015–16 financial year: HCF (-0.1%) Medibank (-2.5%) and Westfund (-1.9%). One fund with national market share below experienced a dip in membership, CDH (-0.8%).

While only these four funds saw a negative change in their overall membership numbers, the industry as a whole came to an abrupt halt.

Industry growth has been slowing gradually since 2011-12 but went off a cliff in 2015-16, experiencing industry growth of just 1.35%. While the growth rate is still positive, the overall new memberships grew at -45%, down from 158,083 memberships overall in 2014-15 to 86,939 in 2015-16.

Figures from APRA's Private Health Insurance Membership and Coverage December 2016 (issued 14 February 2017) also highlight this stagnation, with coverage for hospital and general (extras) treatment remaining rather flat.

If you're looking to leave your current fund, you're not alone. A recent survey found that 36% of Australians would be willing to ditch their current fund. But before you make the change, you should do your homework.

There are various ways to find a policy that's right for you. From looking at which fund has paid the most benefits to its members and reviewing how a fund has performed in regards to customer satisfaction, to seeing which fund's premiums have risen the most in recent years and making sure that your new fund will cover you for the extras you most regularly claim.

It also doesn't hurt to look to see if a fund is offering sign up offers such as premium waivers and gift cards. Some funds even offer a discount if you pay your premiums up front or by direct debit.

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