An investigation into the Australian health insurance industry by consumer organisation, CHOICE, has found that 19% of health expenditure comes directly from the pockets of consumers and isn’t rebated by Medicare. CHOICE says this is the highest level of consumer contribution of all English-speaking countries.
The news comes following a hike in health insurance premiums last month of 5.6% on average, taking contributions by Australians to twice that as those in the UK. It also follows the change on 1st July last year that saw Australians who earn more than $84,000 (single) or $168,000 (couple/family) ineligible for the 30% private health insurance rebate.
“Worryingly, since means testing was introduced for the private health insurance rebate, the CHOICE investigation uncovered a trend in consumers downgrading their level of cover to accommodate increased costs,” says CHOICE spokesperson Tom Godfrey.
“The news gets worse for consumers who prepaid before 30th June last year as they will experience the full bill shock for the first time, as we head into premium renewal season. They will also not receive their private health insurance rebate on the lifetime health cover component of their premium from 1st July.”
The CHOICE investigation of more than 25,000 health insurance policies found that 14,000 people have applied to dip into their superannuation funds to pay for health costs.
“This is a move that should concern health and welfare agencies and is a potential indicator of those with chronic illnesses struggling to stay afloat.”
“The investigation highlights a concerning trend in Australian healthcare where the most vulnerable consumers are facing dramatic health insurance premium price rises for policies that compromise their health and financial security.”
CHOICE says there are some simple things consumers can do to offset the impact of the price rises and policy changes.
1. Review your Extras Cover. Unless you’re a big user of the services available in Extras, it may be more cost-effective not to pay the premium but to pay for the services when you need them.
2. Take a look at your Hospital Cover and ask yourself why you have it. Is it for tax or health purposes?
3. Check for a discount for paying annually or via direct debit. You can compare options at privatehealth.gov.au
4. Compare policies also at privatehealth.gov.au or choice.com.au
5. Check whether you qualify to join a restricted membership fund
6. Beware of lifetime limits and combined annual limits. This is especially relevant to Extras Cover
How to switch funds
1. Get a detailed quote
2. Ask for the cover to start only when the old cover is cancelled
3. Get a clearance certificate from the old fund
4. Make a copy of your itemised claims statement and send it to the new fund
5. Cancel direct debit with the old fund and your bank.
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