Switch, ditch or downgrade? The tough calls Aussies are making with their health cover
Key takeaways
- According to Finder's recent Health Report, millions of Australians are reconsidering their private health insurance policy.
- 7% of respondents highlighted cost as their reason for cancelling health cover entirely.
- While cutting your policy can help ease costs temporarily, it can introduce other financial penalties.
Health insurance used to be one of those bills people set and forget. Not anymore.
New research from Finder's Health Report shows just how much that's changed, with growing numbers of Australians actively reconsidering whether their cover is still worth the cost.
The numbers behind the scepticism
Around 15% of Australians say they're weighing up cancelling or downgrading their policy over the next year.
That breaks down to roughly 4% planning to drop cover entirely and 11% considering a cheaper, lower level of cover to ease the financial strain.
A separate 7% say they've already pulled the pin on their health insurance because of cost, totalling to an estimated 1.5 million Aussies who've gone without cover in the last 12 months alone.
Only 38% of people say they're actually happy with the policy they have.
Combine that with the 29% who don't have cover at all and that's a sizable chunk of the country either doesn't trust the value of their policy or has opted out of the system altogether.
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But it's not all bad news.
11% of Aussies mentioned they were currently on the market for a better deal,
So, why the sudden scrutiny?
Well, it all came down to value.
As household budgets keep getting squeezed, people are taking a harder look at every regular expense. And unfortunately, health insurance is one of the top costs to be cut.
The real cost of cancelling your health insurance policy
The challenge is that downgrading or cancelling isn't always the cost-saving move it appears to be.
A cheaper policy might mean losing access to benefits that would otherwise save money down the track, while cancelling altogether can leave people exposed to high out-of-pocket costs if they need care unexpectedly.
Dropping hospital cover can also mean picking up the Medicare Levy Surcharge, an additional 1% - 1.5% tax charged to Aussies who earn more than $105k.
In some cases, a basic hospital policy can actually cost less than that surcharge, meaning the "savings" from cancelling cover don't always add up the way people expect.
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