Aussies exiting private health insurance in big numbers

Many people are abandoning their private health insurance policies.

Aussies exit private health insurance

Many people are either abandoning their private health insurance policies or downgrading to lower-cost, lower-benefit products as premium increases continue to outpace inflation and wage growth.

In its annual report into the private health insurance industry, the Australian Competition and Consumer Commission (ACCC) found Australians are increasingly dropping their hospital cover, instead opting for just extras cover.

Many people are also choosing policies with higher excess payments in an attempt to keep policy premiums to a minimum.

“People are increasingly feeling the pinch of private health premium increases and growing gap payments,” ACCC deputy chair Delia Rickard said.

“In response, many are shifting to cheaper products with reduced coverage, and some are dropping their cover altogether.”

The affordability of private health insurance has been an increasing concern for consumers in recent years.

Many insurers will be updating their policies ahead of the Australian Government’s private health insurance reforms, which aim to make private health insurance simpler and more affordable. This legislation will come into effect on 1 April 2019.

The ACCC is warning private health insurers they must provide clear, prominent and timely communication with customers regarding changes.

“Private health funds have clear obligations not to mislead their customers under the Australian Consumer Law,” Ms Rickard said.

“Failing to properly tell customers about cuts to their benefits or policies may be a breach of the law.

“Ahead of 1 April 2019, we will be monitoring to see how health funds are telling consumers about changes to their policies and benefits.

“Private health insurers need to be transparent about what is and isn’t included in their policies or risk losing their customers’ trust and ultimately, their business.”

YourLifeChoices members told us in our 2018 Retirement Matters Survey that private health cover was the second biggest drain on their income after energy costs. The survey also revealed that private cover was very important to most, with 70 per cent of survey respondents saying they have health insurance, and 81.5 per cent of that number saying they planned to maintain their cover for life.

Read the ACCC’s private health insurance report.

Is the cost of private health insurance too high? Have you stopped paying for private health insurance recently? What was the main reason for your decision?



    To make a comment, please register or login
    27th Nov 2018
    It seems to me that as we get older, the risk to insurers grows so that it is within their interest to have people drop out of insuring with them. I think they welcome it.

    27th Nov 2018
    "Aussies exiting private health insurance in big numbers".

    Small wonder: it's a SCAM.
    27th Nov 2018
    Costs too much and we do seriously consider opting out BUT they have
    us by the short and curlies, as you then wonder if you are going to
    need it without being on a long waiting list for Public. I have just had
    a health problem arise out of the blue - and may have to go into Hospital.
    Not a Bludger
    27th Nov 2018
    Seems typical of Australia today.
    Don’t bother to provide for yourself - just expect someone else aka government to fix/pay for your problem - and if they do not, moan and groan and claim discrimination.
    27th Nov 2018
    You have a point, mate. If i knew 40 years ago what is going to happen to private health insurance I would have shoveled the cash each year somewhere no one can find it and would have a cushion today for emergencies. Would certainly be more than $100K in that package today - you could call it insuring yourself. Alas, too late now.
    27th Nov 2018
    Trouble is Cowboy Jim people never have been able to do that unless they are super wealthy. Ordinary people have a heap of needs that claim any money put aside and the one with top priority would get the funds. We have always had private cover and just shop around for a good deal like you do with gas and electricity, etc.
    27th Nov 2018
    It's important to have private health cover that is not for profit. (Ditto nursing homes and child care centres).

    I had a pinched sciatic nerve which required a microdiscectomy surgery. I have private not for profit health cover. The neurosurgeon told me he could operate in 8 days time. This was due to a public holiday falling on his operating day or it would have happened sooner. I sat in his rooms and cried... "I can't wait that long, the pain is so severe..." He asked me if I minded Residents coming from the Royal Adelaide hospital to observe my surgery. OK I said. This is because in the public health system I would have waited 18 months to 2 years. These Residents never see this particular surgery done in the public system at the right time - soon enough. When they get to see a problem such as mine the damage is so advanced that proper repair is no longer possible.
    So I guess my point is, it depends what is wrong with you as to what you do. Private health or not - it's a gamble. In an emergency that's when the public system comes into its own - except if the ambulances are ramping...
    27th Nov 2018
    Ditto Jennie! Not for profit is the way to go. Ours has free day surgery too which is another bonus. That sounded like agony so glad you could be fixed promptly.
    Agree also with public hospital good for emergencies like an ambulance call for things like suspected heart attacks.
    Recently we had need of that service and thanks to our wonderful Dan Andrews government here in Victoria our local Frankston ER hospital is excellent.
    Thrilled that Dan and his team are back again as they have been doing good work in Victoria not only with the hospitals but TAFE as well and much more.
    27th Nov 2018
    Biggest scam in history should be a royal commission in to private health

    and i was in it for 30 odd years
    27th Nov 2018
    Absolutely, a Royal Commission is necessary without any further delay.

    Too much of fraud in this business - big Gaps caused by Medicos Unions collusion to benefit greedy doctors, as well as by Govt keeping Medicare rebates too low and not allowing Private Insurance to cover these Gaps, massive profit-driven pricing by Insurance industry driven by CEO greed, No real competition as products are not standard and not comparable hence no real competition, Not a real Insurance as they only pay capped amounts with the remaining amount being the Consumers Risk i.e. the so-called Insurance is not bearing the Risk, etc, etc.

    And, all the ACCC can say is “People are increasingly feeling the pinch of private health premium increases and growing gap payments,” !!! Where is the BIG STICK? Yes, the RC is the only way out of this mess NOW!

    27th Nov 2018
    Routine check up last week following eye surgery. Exactly 4 minutes attention from optometrist charged at $231, with $37 Medicare rebate. No wonder health insurance is expensive! It's time these rorters were brought to account. That specialist may have studied long and hard and have some business costs etc., but he's grossing over $3000 per hour - more than $120,000 per week. There are 4 in the practice. That's nearly half a million per week between 3 clerical staff, 1 nurse and 4 specialists. Surely nobody could justify that!
    27th Nov 2018
    NaB we pay for Medicare on top of our tax every year if that isn't paying I don't know what is
    27th Nov 2018
    It isn't the premiums that prompted me to drop out a few years ago. It was the prohibitive gap between the cost of the surgery and what the fund would pay. As a pensioner I struggled to pay premiums. To be told I had to find another $6000 was the last straw. I now pay only extras cover, and take my chances in the public system. Not ideal at 74 with heart issues and joint replacement needed
    27th Nov 2018
    The only reason I've stayed in private health, is to get the specialist of my choice when admitted to hospital. I think uninsured patients get the 'duty' specialist or mainly a registrar doctor (under training), sees them. Not ideal.....
    27th Nov 2018
    I also pay for extras and have hardly ever used them. The only one I do use is dental and only get 60% back. The funds won't let you just insure for dental alone either, it has to be grouped together as a so called package (ie rip off). The funds know that you very rarely use all the extras anyway, so they profit again.
    double j
    27th Nov 2018
    Paddington. Thanks for the good words about Frankston ER My adult children work there and care about people
    28th Nov 2018
    A bit of a salary sacrifice rort like superannuation. Sucked in to the system to save tax but end up lining some greedy pigs pockets instead & get sweet f.a in return!
    28th Nov 2018
    Have never had health insurance & no regrets but have had a pretty good run with health so far. Mind you the money I've saved by not having it is nowhere to be seen so if anything goes wrong I'll have to euthanase as there's no money put aside for anything major (too busy paying off the mortgage & regular & surprise bills!

    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles

    You May Like