Is private worth it?
SAVE your money and don’t bother with private health insurance.
The public hospital system is now so good Australians can get away with not joining a health fund, a major investment bank has found. And the claim private health insurance is vital to easing pressure on public hospital waiting lists is also a myth according to investment adviser Morgan Stanley.
In a 63-page analysis obtained by News Corp the investment bank warns “many people now see the free public hospital system as adequate catastrophe cover”.
Morgan Stanley’s executive director Daniel Toohey says the private health industry has become lazy and the government should refuse any premium rises for three years to force the industry to sort itself out. The report even dismisses the government’s tax penalty that forces higher income Australians into private health cover as losing its sting as premiums skyrocket.
The bank produced the research to guide its advice to clients thinking of stockmarket investments in health funds and public hospitals.
Other research by independent market research company IPSOS has also found the confidence of Australians in the public hospital system has risen by 10-15 points in the past decade to over 80 per cent.
The revelations come as health funds are under fire for covering less and less of their member’s health bills as profits surge. Gap payments health fund members face when they use a surgeon in a private hospital have soared nearly 20 per cent.
Funds are blaming the government’s three-year Medicare freeze for the rise that has seen patient out-of-pocket expenses rise to an average $300 per episode of care.
Medibank research shows some doctors are charging $17,000 more than their peers for some operations leaving their patients with massive out-of-pocket expenses.
Breast cancer patients can face surgeon’s out-of-pocket expenses of up to $3500 for a lumpectomy and up to $12,500 for a mastectomy, their anaesthetists will charge their own out of pockets.
Rising premiums and declining value is behind a continuing fall in health fund membership which has declined from a peak of 47.4 per cent in 2015 to 45.8 per cent in September. Health funds made $1.4 billion in profits last financial year, dragging in 4.3 per cent extra premium revenue, benefit payouts only rose by 3.7 per cent.
Morgan Stanley predicts health fund membership will continue to fall placing pressure on private hospitals but it says public hospitals will be able to cope with increased demand.