Enthusiasm for private health insurance is waning.
Enthusiasm for private health insurance is waning, according to the findings of Roy Morgan’s Single Source Survey.
Researchers conducted in-depth personal interviews face-to-face with over 50,000 Australians, 8000 of whom had health insurance funds.
When asked why people have health insurance, the majority (70.9 per cent) agree that ‘above all else, private health insurance is about knowing that you will be able to cover the cost of big medical expenses if they arise’.
This figure has declined from 77.5 per cent over the past four years, yet it remains the top priority for fund members, ahead of agreement on ‘health insurance gives me peace of mind’ with 68.1 per cent, which has also declined from 74.5 per cent over the same period.
These aren’t the only adverse trends registered in the 12 months to October 2018 compared to the same period in 2014. In fact, negative trends were registered across the 10 statements shown in the following chart.
The biggest drop was recorded in the ‘it is essential to have private health insurance’ category, which declined by 10.0 per cent, followed by ‘it is difficult to understand what you are actually covered for with private health insurance’, which increased to 43.7 per cent, and ‘extras and hospital cover are equally important’, down 7.1 per cent points to 54.1 per cent.
Pre-Boomers (born before 1946) strongly agree that ‘private health insurance is about knowing that you’ll be able to cover the cost of big medical expenses’, compared to only 56.5 per cent among Gen Z.
Millennials and Gen Xers ‘want the cheapest and don’t care provider’ and strongly believe that ‘only reason to have it is to avoid paying tax’, although many ‘don’t see much value in having it’.
The youngest generation (Gen Z, aged 14 to 27) is the least engaged in private health insurance and are more likely to ‘rely on recommendations from friends and family in choosing a fund’.
Is it surprising that the attitudes towards having private health insurance are waning? With the cost of cover rising steadily each year, and the level of cover seemingly lessening, it should not be a revelation to providers that the public are becoming disinterested in having cover – especially when the cost far outweighs the value.
Many Australians would weigh up the monthly expense and feel better off if they banked that money to put towards possible emergencies. Others just can’t afford it.
Last week, YourLifeChoices received a message from a member who said it was cheaper for he and his wife to have two singles policies.
“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,” wrote Derek*.
“Can your team investigate and explain if this is correct and is there any advantage or disadvantage to a retired couple having a family health insurance cover or having it as two single policies?”
We have put in a request to the Consumer Health Forum to help us investigate whether this is standard practice.
While we await a reply, we thought we’d ask you about your attitudes towards private health insurance. So why not take part in our Friday Flash Poll and let us know?
*Not his real name
And of course, we welcome your opinions in the comments section below.
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