‘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,’ says peak body chief.
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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