Senate health insurance report: value is dropping
"Transparency may assist consumers in being better informed when buying and using their private health insurance."
A Senate report handed down on Tuesday this week says there is a need to increase transparency to aid consumers in buying and using their private health insurance.
The report highlights various issues in the health insurance sector including transparency, affordability and a growing lack of value for money. In regards to value for money, the report cites the increase in policies with co-payments or exclusions, which jumped from 7% of policies in June 2007 to 40% in 2017.
"The increase in premiums and the increase in the number of exclusions in policies has eroded the value of private health insurance and led some people to drop or downgrade their cover," the report said.
Also raised was the need to attract more young people in order to balance out the risk profile of the insurance pool, which will in turn help with the cost of private health cover. It's hoped that this may be achieved with some of the reforms announced in October 2017 such as discounted cover for young people. But whether there will be any real impact is up in the air.
"Despite the government's recent announcement, no submitter to the inquiry expected that health insurance premiums were likely to drop in the short term as costs will continue to rise," the report said.
With regards to transparency, the report notes that the complexity of private health insurance is compounded by insurers using terms inconsistently.
"A common recommendation throughout this inquiry has been for the implementation of standardised terminology for health insurance products," said the report.
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