Can older Australians continue to afford the rising cost of health insurance?
Do you have private health insurance? Seventy-one per cent of respondents to a YourLifeChoices survey say they do, and more than three-quarters say they intend to maintain that throughout retirement. But how realistic is that? Can you really afford to keep paying for your insurance?
Private health insurance premiums are rising at twice the rate of the average income. This is especially hard for those on a fixed income, such as retirees, who have to plan for ever-increasing premiums with ever-dwindling funds.
Although we know that healthcare is a major expense for older Australians, new research from CompareTheMarket shows the areas in Australia that have the highest concentrations of people paying the most for private health insurance. In some cases, these communities are paying 50 per cent more for their private health insurance than those in surrounding areas. It’s no surprise that the majority of residents in these postcodes are retirees.
CompareTheMarket says: “Brisbane’s Bribie Island, which has a huge retirement community, pays 50 per cent more for their health insurance compared to their city’s overall average. Looking to Melbourne, and Dingley Village residents could be paying 45 per cent more for their health cover.”
In CompareTheMarket’s survey of sales data across Adelaide, Brisbane, Melbourne, Perth and Sydney, more than two-thirds of over-65s said they were struggling to pay for their health insurance, to the point where they were forced to cut back on other spending, such as groceries and leisure activities, to pay for it.
This is in line with what YourLifeChoices members tell us. In our financial literacy survey, 25 per cent of respondents said private health insurance was the single biggest challenge to living within a budget.
More than half said that private health insurance was too complicated to understand properly. And if you find private health insurance complicated, how can you negotiate a better price?
It’s not a new idea, but sometimes a reminder can be helpful – talk to a person. Pick up the phone, call your private health insurance provider and check some basics. Ensure you are not paying for unnecessary costs, such as pregnancy extras or family members no longer living with you.
Once you’ve made sure you have the right product with your own insurer, call some competitors and see if they can beat the price. Then, if you don’t want to bother changing over, call your own provider back and use the new quotes as leverage to get a better deal. Ask if they will price-match.
Sometimes, this approach is better than using a comparison site as not all companies are necessarily represented on such sites.
By speaking with a person, you can ask them to explain any legalese in simple language and you get the benefit of their knowledge. Just be sure to ask for a receipt number for your call, and then you have proof of what was said in case the insurer tries to go back on it later. It’s a win-win.
What do you think? Should more be done to reduce the burden of private health insurance? Or should we be improving the public system, so it’s not an issue?