Consumers are being ‘scammed’, health fund analysis finds

Government bid to simplify private health cover has failed, says CHOICE.

confused couple

A government initiative to simplify a confusing array of private health insurance plans appears to have failed spectacularly. Consumer advocacy group CHOICE says “health insurers are scamming Australians”, that we are paying more than we need to and that the federal government must hold a public inquiry.

A ‘simplification’ of policies that took effect in April grouped options into gold, silver and bronze. However, the addition of ‘plus’ categories muddied the waters.

CHOICE research has discovered that many Australians buying Silver Plus policies are paying more than some funds’ Gold policies and receiving fewer benefits.

The worst offender nationally was Frank (GMHBA) Health Insurance with the most expensive Silver Plus policy.

Major health insurers such as Medibank, Bupa, HCF, HBF and nibNIB also feature prominently in the CHOICE analysis.

“Health insurers are scamming Australians with high-cost ‘plus’ policies,” says CHOICE health campaigner Dean Price.

“We’ve found over 215 Silver and Silver Plus policies that cost more than competitors’ Gold policies. That means you pay these insurers more for less coverage. That’s less money in your pocket and more surprises when the worst happens and you end up in hospital.”

The analysis was based on single policies with a $750 excess without the rebate. CHOICE says the majority of policies were Silver Plus and a handful were Silver, but all cost more than at least one Gold policy in the same state which had more cover.

Mr Price said: “Minister Hunt tried to make health insurance clearer, but the health insurance lobby succeeded in making it complicated. CHOICE’s investigation shows how the health insurance industry is profiting from the confusion they created.

“People already find health insurance high cost and low value. This investigation uncovers more reasons why people don’t trust the companies offering these expensive policies. The death spiral this industry is facing is self-imposed and they can’t be trusted to fix it themselves.”

Australian Healthcare Reform Alliance chair Jennifer Doggett said CHOICE’s findings clearly showed that the government’s bid to make private health insurance more affordable and consumer friendly had failed.

“Consumers are clearly no better off than they were before these changes were introduced and are still struggling to make sense of a poorly designed, inefficient and inequitable insurance system,” she said in The Guardian.

“These findings will erode the already fragile relationship consumers have with private health insurance and reinforce their belief that private health insurance funds are putting their own interests and profits above consumer interests.”

Worst offenders

NSW/ACT – 32 policies more expensive than Gold

Frank (GMHBA) Top Hospital (Silver+)

Australian Unity Advanced Hospital (Silver Plus)

RACQ (MyOwn) Silver Plus Premium Hospital

Northern Territory – 40 policies more expensive than Gold

Frank (GMHBA) Top Hospital (Silver+)

TUH Silver + Family Hospital

Latrobe SilverPlus Hospital

Queensland – 33 policies more expensive than Gold

Frank (GMHBA) Top Hospital (Silver+)

Australian Unity Advanced Hospital (Silver Plus)

RACQ (MyOwn) Silver Plus Premium Hospital

South Australia – 22 policies more expensive than Gold

Frank (GMHBA) Top Hospital (Silver+)

Australian Unity Advanced Hospital (Silver Plus)

RACQ (MyOwn) Silver Plus Premium Hospital

Tasmania – 30 policies more expensive than Gold

Frank (GMHBA) Top Hospital (Silver+)

Australian Unity - Advanced Hospital (Silver Plus)

RACQ (MyOwn) - Silver Plus Premium Hospital

Victoria – 34 policies more expensive than Gold

Frank (GMHBA) Top Hospital (Silver+)

Australian Unity Advanced Hospital (Silver Plus)

CUA Premium Non-Obstetrics (Silver Plus)

Western Australia – 24 policies more expensive than Gold

Frank (GMHBA) Top Hospital (Silver+)

TUH Silver + Family Hospital

Latrobe SilverPlus Hospital

The full list of high-cost plus policies is available here.

Are you concerned you are paying too much for your level of cover? Since the ‘simplification’, have you found it easier to select the best policy for your needs?

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    COMMENTS

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    31st Oct 2019
    9:57am
    Private health insurance is a scam - period.
    VeryCaringBigBear
    31st Oct 2019
    11:11am
    Medicare is an even bigger scam.
    *Loloften*
    1st Nov 2019
    4:57am
    Sure is VCBB - used to be on Top Private Hosp cover, demoted (no consultation with me) by Medibank to Silver+ which includes stuff I'll never need & excludes stuff I may need, @ same expense of prior Top Policy. Sons were rapt when told 'em that finally pee'd off enough to discontue my Medibank insurance (+ sold my Medibank shares many mths ago @ top price, knew this industry was a shambles).....saying, as younger Gens do" u would have saved $16,000 in the past 10yrs when never made a single claim Mum." & they're right. Feel very grateful that healthy, no need to claim a refund for past decade but so pee'd off that was demoted to Silver+ when used to be Top....@ more cost!!? ACA on Ch9 wk/days did an invegestergative story on Private Health Insuranance last nite....Medibank did not fair well.
    floss
    31st Oct 2019
    10:27am
    A bit like our Federal Government it is in a mess just plain bloody hopeless.A government approved scam.
    roy
    31st Oct 2019
    11:37am
    Good old floss, rather have shifty shorten would you, sheesh?
    VeryCaringBigBear
    31st Oct 2019
    11:15am
    No mention of HCF in that list of worst offenders but article gives the impression HCF is bad.
    KSS
    31st Oct 2019
    12:22pm
    You'd need to go and see the full list of 215 policies to see the HCF policies that are referred to.
    VeryCaringBigBear
    31st Oct 2019
    11:15am
    No mention of HCF in that list of worst offenders but article gives the impression HCF is bad.

    31st Oct 2019
    12:21pm
    Well we had the other Your Life Choices article on how much better financial mangers women are from men. So this is an issue that needs to be addressed by women.

    It will be in safe hands then.
    floss
    31st Oct 2019
    12:24pm
    ROY in case you have not woken to the fact Slow Mo is running the country it is his job alone to fix this mess so get your head into gear before you make any comment.
    roy
    31st Oct 2019
    7:02pm
    Shifty Shorten walks on water, we would be living in a land flowing with milk and honey flossie dear, why oh why did he not get elected?
    older&wiser
    31st Oct 2019
    1:38pm
    So much for the vaunted 'three tier' system. I used to be in Gold cover previously with my health fund. With the changes, I was put into 'Silver Plus' and allot of the procedures I was previously covered for, were now only available in Gold. When I queried this with the fund, I was told I would have automatically gone to the 'new' Gold, if I had previously been in 'Gold Premium' (a level I knew nothing about). Soon you will need Gold Plus/Premium/Superior just to get your tonsils out. And so sick of funds that - if you do manage to find one that does not cover obstetrics, IVF, Weight loss surgery - is always still the highest level.

    31st Oct 2019
    6:18pm
    Happy with Medibank Private so far, needed them a few times, use them as well for international travel insurance. Should you go out of the country for 2 months your membership can be suspended for the duration and is immediately reinstated upon return. Has to be 2 months or more. No one likes the fees but then a lot of people on this site want everything gratis, and that is not the real world.
    Elizzy
    31st Oct 2019
    10:03pm
    I keep saying it: it's not so much the premium but the GAP. What is the point of paying a high premium when the gap can run into thousands of dollars. In the European country where I now live, social security covers most medical costs including dental, with the balance covered if necessary by private medical insurance. You might occasionally be left with a tiny percentage to pay. Medical practitioners' charges in Australia have to be controlled.
    *Loloften*
    1st Nov 2019
    3:49am
    Exactly Elzzy.....our now healthy/wealthy & not so wise Pollies have no idea what we so called "baby-boomers" are coping with, not least being highest ever mortgage interest rates & now, lowest ever interest rates on our meagre savings ("Super"almost negligable back then....think ard 3%). It's now proven that we've been ripped off by our Health Insurance companies. What the hell are we paying our Pollies for.....they're all ignoring us & keep talkng abt tax payers....OAPs are tax payers, thx to Howard's GST everyone is a tax payer. Aus is in recession altho' our current Pollies won't admit it as they're all OK, living in luxury, funded by us all.
    GeorgeM
    2nd Nov 2019
    5:03pm
    You are exactly right, Elizzy, I have also written many times about the GAP and uncontrolled doctors fees, as well as not including all items such as dental and pharmaceuticals. It is a total SCAM industry.

    The best comment in the article above is "The death spiral this industry is facing is self-imposed and they can’t be trusted to fix it themselves."
    The Govt MUST step up, and start a Royal Commission asap, as no tinkering around the edges will fix anything!
    Elizzy
    31st Oct 2019
    10:07pm
    ...oh, and our total annual insurance bill (car, house, medical) is less than what we paid for house alone in Australia.
    *Loloften*
    1st Nov 2019
    2:40am
    And my single only Private Hosp insurance (no "extras"& not a single claim for past 10yrs) now just a Silver+ only policy costing me approx $1,600+annually, thx heaps Medibank....& u were stupid enought to ask me why I discontinued my insurance with you!? I'm now just one of we "baby-boomers" that will clutter Public Hospitals which won't be able to cope with us, can't wait for that wonderful experience when needed hahaha....thx heaps for your neglect/ignorance both State & Fed approx 50/55yr old Pollies, a useless bunch of careless ppl living in luxury @ our ecpense.
    *Loloften*
    1st Nov 2019
    4:04am
    Disconituined my Medibank Private Hosp Insurance when was dropped from Top
    Cover to Silver+ (w/out any consultation with me) & was more costly than ever. Hadn't claimed on anything from them for 10yrs, will now be a "burden" (as OAPs appear to be with everything these days) on the Public Hospital system if/when needed.
    Anonymous
    1st Nov 2019
    8:16am
    A solution could be if C/Link would allow us to have a special account of say, $20'000, to be used only for medical purposes
    and not be counted in the asset test, we could be self-insured. That would roughly be the price for a private hospital stay
    for a more serious illness. Our yearly premiums are $5270 (2 of us). C/Link should allow us to have an account like that but
    then keep dreaming . . .


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