Numb the price pain of health insurance
As premiums rise insurers are trying to stop customers dropping cover, writes Sophie Elsworth
THE soaring cost of private health insurance is causing Australians to reassess the need for cover and has resulted in many ditching it.
Latest figures from the Australian Prudential Regulation Authority found, in the 2018-19 financial year, 11.22 million Australians – or 44.2 per cent of the population – had hospital cover.
This is down on 2017-18, when 11.25 million Australians had hospital cover, or 45.1 per cent of the population.
And it’s expected health insurance premiums will rise by about 3 per cent next year – a decision that Federal Health Minister Greg Hunt will make in the coming months. This would push up household costs by about $150 per year.
Insurers are having to work hard to retain customers while also trying to attract new ones.
The number of Medibank customers with hospital cover fell more than 16,000 year on year, but chief customer officer David Koczkar said it was trying to give customers more value for money.
“We have launched our Live Better rewards program which recognises and rewards our members for taking healthy action to improve their health and wellbeing,” he said.
“Customers can earn rewards points and earn them towards things like gift cards or get more on their extras, like a massage or physio service.”
Members should take advantage of two free annual dental check-ups, X-rays and a mouthguard, Mr Koczkar said.
Health funds are currently working with the Federal Government to determine what their annual increases will be in 2020. This year premiums rose by 3.25 per cent – the lowest increase since 2001.
The Government has rolled out a series of measures to reduce costs, including the ability for funds to introduce higher excesses to help bring down the overall cost of a policy.
The excess limit for singles is now $750 and for couples and families it’s $1500.
Major insurer NIB saw an increase in its membership by about 6000 in the 2018-19 financial year.
NIB managing director Mark Fitzgibbon said “affordability is certainly an issue”.
“Premiums have been going up and so, too, has the pressure on affordability,” he said.
“And wages haven’t been going up like they have in previous decades.
“The challenge for us is to demonstrate the importance of having health insurance; it’s overrated until you actually need it.”
Mr Fitzgibbon urged people to think twice before dropping their cover or not taking it out. “You don’t want to find yourself in a situation like with your home and car insurance where you have an adverse health event and you don’t have the financial protection and support of private health insurance,” he said.