Numb the price pain of health in­sur­ance

As pre­mi­ums rise in­sur­ers are try­ing to stop cus­tomers drop­ping cover, writes So­phie Elsworth

Mercury (Hobart) - - MONEYSAVER­HQ -

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.

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