Paying more for the privilege of less health insurance benefits

By Grace Ormsby

March 04 2020
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The consumer watchdog has raised an alarm on the fact that nearly 60 per cent of private health insurance policies now have exclusions embedded into them that consumers may not be aware of.

In its annual report into the private health insurance industry, the Australian Competition and Consumer Commission (ACCC) has outlined that more than 57 per cent of hospital treatment policies held by Australians had notable exclusions attached.

Just 12 months ago, only 44 per cent of hospital treatment policies held by Australians contained such exclusions.

According to the ACCC, the exclusion of some benefits for certain treatments in a policy can provide lower costs of premiums to consumers.

But it does come with potential pitfalls.

ACCC deputy chair Delia Rickard highlighted how “many people may not be aware their policies may have exclusions and don’t realise they would not be covered at all for treatment as a private patient for those conditions”.

She said the consumer watchdog had been working with private health insurers on how they could better communicate such detrimental policy changes to consumers.

“Insurers need to make sure these changes are communicated clearly, prominently and in a timely manner to avoid misleading consumers.”

But, despite the higher proportion of exclusions being reported, the watchdog has found Australians are still paying more for private health insurance.

While the rate of increase in average annual premiums has slowed over the past five years, average premiums have still increased by more than inflation and wage growth over the year, it was highlighted.

Despite consumers continuing to drop out of private health insurance, Australians paid over $24.5 billion in private health insurance premiums in 2018–19.

It’s an increase of over $661 billion, or 2.8 per cent, from the 2017–18 financial year.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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