Switching health funds in March?
How consumer satisfaction can help you find a better fund.
Are you unhappy with your current health cover and looking to switch? If so, you've picked the right time of year.
If you change funds before close of business on 31 March 2017, you can prepay your next year's premiums without them being impacted by the rate rise that comes into effect on 1 April 2017. Plus, if you're really lucky, you may be able to switch to a fund that offers a discounted rate to those who pay their premiums upfront. But how do you choose which fund is right for you?
There are many factors to consider when looking for a new fund such as the level cover of cover you need, the benefits on offer and the cost of the policy. One area not usually considered by your average punter is how well a fund performs with regards to consumer satisfaction.
This is probably because satisfaction is something that is hard to measure and not readily available to someone planning to move funds then and there. However, one way to find out how satisfied consumers are with their health fund is by looking for consumer-based research.
By looking at reports, you can see if the fund you're with or the one you're planning on switching to is keeping its current members happy. For example, according to a survey conducted by Roy Morgan Research on satisfaction among private health insurance policyholders, satisfaction with health funds is down almost 2% from 76.3% in September 2015 to 74.4% in September 2016.
Another way to gauge the performance of a health fund is to look at its member retention and whether its membership growth is on the decline. According to the latest Private Health Insurance Ombudsman (PHIO) State of the Health Funds Report 2015, "Whether a fund can attract new members and, more importantly, retain members is also an indicator of member satisfaction."
The graph below is an overview of the average percentage of new members for each fund over the last five years. It also shows how each fund's member growth fared against the industry growth rate (in red). By consulting this type of information prior to switching health funds, you might be able to spot a trend in a fund's popularity.
According to recent survey data, one third (36%) of Aussies would be happy to leave their current fund if they could find a better deal. Additionally, 22% of Australians said that they would ditch their cover altogether if premiums went up by more than 5% in 2017.
If you're planning on switching, don't let yourself be sold on a policy that's cheaper but that doesn't actually offer you the cover you need. "We have noticed that when a consumer expresses dissatisfaction about a premium increase, a common response from the fund is to offer them a lower hospital policy," the PHIO report stated.
Compare your health insurance options and make sure you're getting a deal that is both good for your budget and good for your needs.