Beware health fund ‘rip-offs’

Health insurance rebates are shrinking, costs continue to rise, out-of-pocket fees are troubling to say the least and transparency is an issue. The system will change from Monday, but many problems won’t be solved.

Consider these two warnings from YourLifeChoices members.

Mike wrote:

“I wish to draw the following ‘rip-off’ to your attention.

“We have been insured under the top cover for the past 20-plus years. I finally decided to look at the benefits under the new codes and discard the unsuitable ones.

“Our new premium comes under Gold.

“Gold covers, among other things, pregnancy, IVF and male sterility reversal.

“Being pensioners in our 70s we hardly need pregnancy, IVF and sterility reversal so we decided to have them removed with a corresponding drop in the premium.

“We contacted HBF, who said we would have to drop to Silver to have these items removed, plus this would remove the dialysis (which we did not ask for). Despite several contacts, HBF advise there is no way we can eliminate the items that we will never use. So, to ensure we have cover for dialysis in case of need, we have to pay for a Gold policy.

“I have to believe there are hundreds if not thousands of over-60s who have no need for this cover but are still paying.

“I hope I have explained my frustration.”

YourLifeChoices contacted HBF for comment but has not received a reply.

Denis wrote:

“My wife and I are retired. We have top family health insurance, hospital and extras – if we had our health insurance as two single policies it is cheaper by about 8 per cent. We’re with AHM and it’s about $25 a month cheaper with individual policies. It’s not a fortune but multiply by 12 and it’s a few dollars.

“A rather confused reader.”

YourLifeChoices contacted AHM for clarification but has not received a reply.

The Consumers Health Forum (CHF) believes an investigation into the industry is overdue.

CHF communications director Mark Metherell told ABC radio: “We have been arguing for some years that there needs to be a Productivity Commission inquiry into government assistance to health insurance to sort out what is a highly complex, highly costly, highly sensitive system.”

In response to whether the upcoming Gold, Silver, Bronze system will be effective, he said: “As long as people are prepared to spend a bit of time, uniform categories will make choice easier. It may help to avoid unnecessary costs, but it does take time and patience.”

He added: “Very powerful interests are involved in this and a lot of money is at play.”

A Roy Morgan survey, based on data for the 12 months to December 2018, found that only 55.4 per cent of private health insurance fund members agree that ‘it is essential to have private health insurance’. This continues an annual decline since December 2014 when it was at 65 per cent.

“Other declining attitudes among members over the last four years include the increasing concern that it is ‘difficult to understand what you are covered for’, which had an increase of 7.5 percentage points (to 44 per cent). There was an increase of 5.2 percentage points in ‘I don’t see much value in having it’ (to 16.3 per cent) and an increase of 1.6 percentage points for ‘I want the cheapest and don’t care about the provider’ (to 21.7 per cent).

Roy Morgan industry communications director Norman Morris said: “Any further decrease in attitude towards health insurance that may result should be of major concern to health funds and government. Any further decline in membership will lead to more pressure on the public system and as a result increased government funding.”

The Australian Competition and Consumer Commission (ACCC) urges everyone not to “set and forget” their health insurance.

“Consider whether a policy covers the conditions that are most relevant to you or your family in the short to medium term,” it says.

“For instance, what is the chance you will incur a sports-related injury? Have a baby? Need a hip replacement? Also bear in mind that there are conditions that you can’t predict, including the need for psychiatric care, cardiac conditions and plastic and reconstructive surgery following surgery to remove cancer. These are all treatments that can be restricted or excluded under lower level policies.”

A difficult task as Mike found out.

Are you across next week’s changes? Have you made any adjustments yet? Do you think there should be a Productivity Commission inquiry into the industry?

Related articles:
The health costs hurting you
GP visits too costly for many
Health insurance value eroded

Written by Janelle Ward

Energetic and skilled editor and writer with expert knowledge of retirement, retirement income, superannuation and retirement planning.

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