Private health cover’s mass exodus continues

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The percentage of Australians with basic hospital cover has dropped to 45 per cent, its lowest level in more than a decade, as almost 30,000 people dumped their policies in just three months.

The latest Australian Prudential Regulation Authority (APRA) report revealed that health premiums rose almost 2.8 per cent over the June quarter – faster than wages and inflation, and out-of-pocket costs are continuing to hurt hip pockets, reports the ABC.

“This is a continuation of the same trend, the same spiralling down trend we’ve been referring to for many months now,” said Australian Medical Association president Dr Tony Bartone.

“We need to address the issues underpinning this decline to ensure equity and access to the public health system.

“Our public health system is predicated on a specific amount of work being done on the private system – that is relieving a lot of pressure on public systems.

“If that was to fall over tomorrow, that would [create] an enormous burden, an enormous burden the public system could not cope with.”

Even the private health insurance industry’s peak representative body is concerned but feels that members will still benefit by hanging on to their cover.

“Of course it’s concerning, we know people are finding it hard to cover the cost of the premiums, and private health is perceived as expensive,” said Private HealthCare Australia chief Dr Rachel David.

“People are getting value for their money, particularly if they hang on to their private health insurance for the long haul.”

Australians pay an average of $315 in out-of-pocket expenses for each hospital visit and an average of $151 in specialist gap fees which varied greatly depending on location.

Canberrans forked out the most for specialists, paying an average gap fee of $271.40, while South Australians paid the least at less than $70.

The Grattan Institute’s Health program director, Stephen Duckett, has a theory about why people are dropping their health cover, pointing out some obvious flaws in the industry.

“People paying health insurance for years and years, suddenly need to use their health insurance, they go to hospital, and they end up with these surprise bills,” he said.

Taking out health insurance is something people in their 20s and 30s grapple with, but what about older Australians who are deciding whether to keep it?

“Then they get really, really annoyed, and this doesn’t help the health insurance industry. People find they’re not covered, and they drop out.”

A spokesperson for Health Minister Greg Hunt said the Government was working to improve the sector.

“The Morrison Government is delivering the most significant reforms to private health insurance in over a decade, which is making insurance simpler and more affordable for Australians,” he said.

“Work has already commenced with the healthcare sector to identify and implement the next wave of improvements for private healthcare.”

In the most recent Retirement Matters survey, 69 per cent of the almost 5000 respondents had private health cover, 81.5 per cent of whom hoped to keep their cover for life. Of those without cover, 73.3 per cent said they were once insured.

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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82 Comments

Total Comments: 82
  1. 0
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    Its the ultimate gamble. On the one hand ‘what if….’. On the other hand you can save almost enough money to pay off a small mortgage. What do you do?
    Answer: look at the genes and your lifestyle then make a call. We went for the no health insurance option but this may not work in our favour forever but then who wants to live forever? Ok some of us do. Enjoy.

    • 0
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      The one Thing they or anyone else never brings in the conversation about Private Health Insurance.
      1. Set aside the amount you are/were contributing, over a period of time you would have enough for the knee/hip replacement.
      2. Being a patient in Private and Public Hospital best to be avoided if Possible in equal disbelief.

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      Chris B T – the thought crossed myself many times about being self-insured. We should have a health fund of close to $100’000 after 25 years in private health (paid $5270 for the two of us for another year). Being on a part age pension it would now mean a loss of $300 per fortnight because of deeming. So as long as we can pay the premium we shall stay with private health. Do agree that on the full pension there is no way anyone could afford it, maybe allowances could be made for age pensioners paying for private health but I do not hold my breath.

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      Agree Chris. This is our philosophy but bear in mine there are some ailments which are ongoing and beyond most of us to subsidise. From my point of view that’s when one has to accept one’s fate rather than try and extract another couple of months or years in a no win situation where nature is going to win anyway.

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      Cowboy Jim
      No claims, prefect health entering retirement Phase Lucky You.
      Elective Surgery is one thing, Medicare Covers Rest.
      Never been digging in pockets for Extra Payments but I’ve haven’t had Elective Surgery.
      The Surgery or Procedures and oncology fully covered by Medicare all within a month, sometimes within in a week.
      I have waited longer for consultations.
      I pulled out of Health Fund nearly 40 years ago.
      Medicare paid everything, Hospitals is something else State or Private hard to find a kind word.
      Spelling errors hopefully OK Now
      {;-)

    • 0
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      Chris – not THAT lucky either. Got $21’000 off the insurance and paid gap payments of $6000 but even so, still would be better off with self insurance, have to admit, something wrong with you and you speedily are attended to in private cover – no waiting list.

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      Cowboy Jim – correct about the ‘deeming’ of the money. A friend of mine recently got caught with this. For years she has boasted about not taking out Private Health Insurance, but putting money into a separate bank account. BUT – when she applied for the Aged Pension, dear old Centrelink rubbed their hands with glee and took this money (around $55,000) into account. She argued it was set aside for medical treatment which she knows she will eventually need, but no, bad luck. So damned if you do and damned if you don’t.

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      Cowboy Jim, we are full pensioners and we are insured. It is $35 per week each with Mildura Health.
      I think it may be about priorities as we do not travel overseas as many on here do. Eating out and take away coffees are not in our budget.
      $35 can be saved by buying specials, and watching each dollar.
      We say don’t ask for extra as we don’t have it. Many are happy just to swipe the card even the ER which helps the public hospital.
      There are actually some decent doctors and surgeons. We have a $500 excess but that is all.

  2. 0
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    We are holding onto our private cover because we believe we cannot afford not to. The waiting lists for so called elective surgeries are very long in some areas. You insure your home, you insure your car, people even now have pet insurance. So why not insure yourself.
    For many people it is a matter of priorities. To us, it comes in as important as food. We do not eat out or go overseas or even have the latte which seems to be so valued. We don’t live in an area where it is exorbitant to reside which means rates are ridiculously high for a start. Holidays mean going to see the grandkids. Values and priorities dictate how we spend our pension.
    If you have funds that you can use for a $20,000 operation then it makes sense not to have private cover. But those people should not clog up the public system. Keep the public system for the poor and the homeless.

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      Paddington, the point is that it doesn’t stop at the private insurance fees. If you use private insurance for a medium sized operation you also often need around $10,000 in the bank to cover specialist gap fees. Have the same operation in a public hospital and it costs you nothing. The difference is not only what we pay annually to the health fund it’s what you need in reserve to cover gap fees and that can sometimes be several times the cost of annual private health care. We have this week paid a gap fee of over $12,000 for my wife’s operation, the hospital had both public and private sections and the same surgeon operates in both. I had to pay the gap fee before I could claim anything from Medibank and I am expecting less than $1,000 back.

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      Unfortunately the private patients clog up the public hospital system, Paddo – most of their operations take place in public hospitals… the only thing that would change without private health care would be the order in which people are done for some things… mind you, that brings under the microscope the ethics of those doctors who allow some to suffer needless pain for longer while they shunt up the dollar payers… disgusting behaviour.

    • 0
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      I do not call it insurance, insurance covers you for most of the expense and does most of the work, have a car accident and after the excess there is no more to do your car is fixed with hopefully the minimum of trouble, have a medical issue and you have to ensure everybody is paid individually, then have your refunds for whatever, When I was covered I received back less than half and had to do all the work, my wife wants to be covered as mentioned here as she has a serious illness. If you have a serious problem on the public list you wait and wait and wait, sometimes with fatal results and can be sent to the back of the list in favour of somebody with COVER, that happened many times while waiting for my heart surgery, but the one thing that sticks in my craw with private COVER is that they do nothing you have to do it all and they just sit there counting their pennies.

    • 0
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      Spot on Ray!

    • 0
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      I’m sorry Paddington but unless you have cash reserves Private Health won’t help. To avoid extra fees you have to use the specialist affiliated with your health fund which may not be your first preference. There will still be extra costs even if you use their doctors. We have a seperate medical account on top of private health but I don’t know how people only on the pension would manage. This is why people with private health often go public in an emergency. They’re not sure if they will be able to afford the extra hospital costs

    • 0
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      Sundays, you are right but there are some operations where there are no specialists listed by the health fund. I had a spinal op last year, Medicare said I could have saved a heap if I had used their preferred surgeon. I asked who he was, they said ‘we don’t have a preferred spinal surgeon. But if you’d had another type of operation you would have been okay.’ Sometimes you don’t have time or ability to chase up and visit alternative surgeons, especially in a wheelchair, sometimes they just aren’t available. Then you secure the right surgeon only to find that the hospital anaesthetist charges you $2,000 over the odds.
      The healthcare fund’s excess is meaningless, it’s only the starting point.
      If you look up any list of top earners surgeons are right at the top of professional earners. I don’t begrudge them that position but some private fees are excessive compared to the public equivalent.

    • 0
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      I have control of that. I don’t go through ones who overcharge. They know we are pensioners and many keep the fees to what is covered by our fund. It has happened with an oral surgeon. It has happened with regular specialist in and out of hospital.
      If I were to use the public system I would swipe my card. Usually go to the one private hospital though.
      You don’t use what you are told. You tell them.
      They quote upfront, so you go elsewhere if they quote too much.
      We find it is good value thus far.
      .

    • 0
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      Paddington, you may think you have control of the situation but you don’t. There are some procedures where it is almost impossible to find an experienced surgeon who prepared to operate for the scheduled fee. Many operations are required urgently and there is simply insufficient time to find a cheap surgeon, that’s even if you want one messing with your body. If you think you can predict what medical care you might need in the future, good for you but I was bullet proof too until I ended up in a wheelchair prior to a very experienced and expensive neuro-surgeon operating on me.

  3. 0
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    Most people just can’t afford it, simple really.

  4. 0
    0

    Despite claims to the contrary by vested interests our Health System is broken. Probably the major reason is that so much of it is driven by profit seeking.
    The cost of health is care is increasing around the world but the addition of the profit motive drives those costs further. The open ended charging by doctors, mainly specialists, really seriously affects patients costs as does the multiplicity of health funds. Competition is good but too much competition with the admin. costs of each really does not work in containing costs.
    The privatisation of Medibank, which while in Government hands did provide a brake on health insurance costs, was not in the best interests of consumers but was driven by ideological considerations.
    The solution is not simple especially for a Government dedicated to right wing ideology and we will probably have to continue to see greater pressure on our underfunded public hospitals.

    • 0
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      No competition with cartels of doctors – perhaps not so oddly the best and most fair-minded ones I’ve met have all been ‘traditional’ Anglo-Celtic in origin…. apart from my current GP who is Sri Lankan and bulk bills everyone, and has patients lined up into the paddock outside…

      Anyway – it’s a classic example of the ‘business model’ having once again failed to produce the goods…

  5. 0
    0

    Despite claims to the contrary by vested interests our Health System is broken. Probably the major reason is that so much of it is driven by profit seeking.
    The cost of health is care is increasing around the world but the addition of the profit motive drives those costs further. The open ended charging by doctors, mainly specialists, really seriously affects patients costs as does the multiplicity of health funds. Competition is good but too much competition with the admin. costs of each really does not work in containing costs.
    The privatisation of Medibank, which while in Government hands did provide a brake on health insurance costs, was not in the best interests of consumers but was driven by ideological considerations.
    The solution is not simple especially for a Government dedicated to right wing ideology and we will probably have to continue to see greater pressure on our underfunded public hospitals.

  6. 0
    0

    The Grattan Institute’s Health program director, Stephen Duckett, has a theory about why people are dropping their health cover, pointing out some obvious flaws in the industry.

    “People paying health insurance for years and years, suddenly need to use their health insurance, they go to a hospital, and they end up with these surprise bills,” he said.
    S-D got right this in my case, I dropped out after many years of membership for this reason.

    • 0
      0

      That’s exactly right, you think you are covered just like with any other insurance, you think your “excess” is the limit bit its not, its only the start, the ‘excess’ is meaningless, its only what you have to pay on top of your fees to even walk into a hospital. The gap fees are the killer and can amount to several times annual insurance costs.

      What’s making it worse is that public hospitals are getting patients to use their private cover for public care. My local hospital ‘intimidates’ patients to use their private cover, it claims it desperately needs the $5million it collects each year in private fees to run the hospital. It has no private facilities but offers a free newspaper and use of the TV in return for private cover, its scandalous. Imagine what that’s costing the insurance companies multiplied by over 700 hospitals nationwide. This is all adding to private health costs.

    • 0
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      Clearly a broken system, Mondo… sad, innit..in the midst of plenty a gulf is yawning, and none has a remedy for it… medical system – heal thyself!

    • 0
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      Heeeey – I got TV for free….. and the only cost was the accommodation for three days unable to drive … and that was subsidised for me … all public…

    • 0
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      Sen.Cit.90, this is one of the few times I can agree with a Grattan Institute comment.

      However, I note that they haven’t mentioned the real causes of these “surprise bills” (not in their genes) – the greed of Doctors charging enormous uncontrolled fees, the unviable Medicare Fees which doctors (and their Unions) won’t accept, and the greed of Private Insurance to create profits (and bonuses for the CEO) at all cost, irrespective of how many people leave this so-called, fake Insurance product which is nothing but a con to refund a defined & limited part of your costs, with you the customer (instead of the Insurer) bearing the Risks for the extra costs.

      Govt needs to get serious and a) Cap the Doctors Fees, b) Set realistic Medicare Fees, and c) Force all Private Insurers to cover all medical costs in full, i.e. NO GAPS other than say the 15% of Medicare Fee Rates. Not too hard!

  7. 0
    0

    Rachel David says people are getting value for their money, well that is nonsense, and typical of people who sound like corporates with profit on their mind. I pay $4784.00 dollars a year for top hospital and extras, but hows this one for extras, dentist, got a temp filling,one small front tooth, cost of this delicate job ( as it must be something deep and special) is over
    $700 .00, Medibank will give me under $500 rebate , but I have been told that I will pay out of pocket $245 dollars myself, I’m retired I have waited several months and as yet have not gone back for the proper work, because I haven’t had a spare $245 dollars to spend on a tooth!
    My point about this private health care is I pay extras which they advertise and some of the rebate is well covered but you still pay a fair amount for dentistry, even with cover, top hospital gets you all the bed time you need , when that happens, yes. But all Xrays etc seems to have different rules, where by when I had a hip replacement several years ago there were little extras that were not covered, and its how the Health Insurers work out their covers and their high or lower standard of covers , per what the poor old customer pays, it is somewhat like how Foxtel manipulate the pay TV packages set up. You have no real choice , you get what you get, and you damned well pay for it in many different areas when in reality we should not be paying a cent, after years and years and thousands and thousands of dollars, my family me and my wife now, have had private cover for 40 years or more, can you imagine how many thousands of dollars we’ve handed Medibank.It is in multiples compared to what we have cost medibank in rebates, and that is why it feels like profiteering?????? I think generally the public are kept in the dark over real costs and overpofits etc, and especially the TV commercials that are run by these health funds, how many millions of dollars has been spent on Television advertising, it sounds like profit making corporatisation of the health industry. I can see the whole country looking at other ways , perhaps just saving their premiums in their bank, and then of course hoping they have enough saved if something drastic happens,and the way specialists and surgeons… (SOME)… charge many occasions people are going to be left very pocket short! The government of which ever colour needs to do something very soon about the premiums and the delivery, because $184 dollars a fortnight for my wife and I is nearly unaffordable and will be sooner than later. Then the public health will be on its knees while health insurers will take whats left and run! Thats how I see it, we are sitting on a health disaster here, we’ll be like America!

    • 0
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      Perhaps that is the plan John to change our health system to be like that in America. It is a fact that certain political groups, like the IPA, believe that is how we should go.

    • 0
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      Perhaps that is the plan John to change our health system to be like that in America. It is a fact that certain political groups, like the IPA, believe that is how we should go.

  8. 0
    0

    My family were in a private health fund for years. Then my husband needed to go into hospital and we were slugged with massive out of pocket fees.
    After almost 30 years of only claiming, every three or four years, for glasses for myself we would have more than three times paid for my husband’s operation. Why should we even have had to pay ANY out of pocket fees?
    The final straw was when they refused to pay for the frames for my new glasses as ‘they weren’t frames’ How the blazes did they expect the lens to stay on my face if the frames were NOT FRAMES????
    Told them there and then to cancel our cover.

    • 0
      0

      I get my glasses from California – top class titanium frames/frameless, and two pair for $75 delivered… sometimes cheaper ….. might be getting some more soon… good to have a couple of pairs lying around…

  9. 0
    0

    I had top private health insurance with hospital and extras. It never paid back more than $200 on my glasses and never more than one third of dental!
    Then I had a ruptured brain aneurysm. I didn’t die, I didn’t get a choice of doctor or hospital (the first one had no ICU beds) I was in hospital for 3 weeks and was discharged with no rehab or follow up care. And for that privilege I had $12,000 in GAP payments. So NO I don’t pay exorbitant premiums and next to nothing back. we’re better off putting that money in an account and saving for the emergency

  10. 0
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    I don’t know where they get these average figures of $315 and 151 from, they are certainly not my experience. Last year Medibank covered less than 10% of my specialist hospital fees and I paid around $9,000 for the surgeon and anaesthetist plus over $3,000 annual fees to Medibank.
    If I insured my car ‘comprehensive’ and I needed $10,000 in crash repairs and the insurance company paid only $800 towards it, I would be asking what’s the point too.
    A major problem is that surgeons and anaesthetists are charging private patients far more than they charge Medicare for public hospital operations. The operations are exactly the same but the charges are not. Fix this and half the problem is solved.

    • 0
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      Totally agree. I have been on top cover and extras. Out of pocket expenses for an operation and 3 days in hospital approx $6000.00. The year before out of pocket expenses of over $3000 for one tooth that required specialist for a root canal. The gaps you have to pay are ridiculous and due to those I am seriously considering pulling out. Getting to th3 point it’s not worth it and yes I have taken out health cover since the mid 60’s.

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