Seniors to feel insurance pain

This week, Health Minister Greg Hunt hinted he would backflip on his assurance to halt health insurance premium hikes and give the green light for an increase of around 3.9 per cent in April. This presents older Australians, in particular, with yet another slug undermining the affordability of private medical care.

A YourLifeChoices enquiry to the Minister’s office for clarification was not answered at the time of publishing.

Mr Hunt was reported as telling that even though the hike would be twice the rate of inflation, the increase would be the lowest in 15 years. His office said more details would be revealed next month.

Department of Health statistics show that, between 2010 and 2017, the yearly average price hike across all major health insurance companies was 5.6 per cent.

Some estimates say the proposed April increase will add $200 a year to premiums for families.

According to a YourLifeChoices survey of 5500 older Australians, more than 70 per cent of retirees pay for private health insurance. Furthermore, the YourLifeChoices December 2017 Retirement Affordability Index™ found that 62 per cent believed they would likely struggle to keep up the cover throughout their retirement as it became less affordable each year.

Only 47 per cent of all Australians are covered by private health insurance and the numbers are declining as premiums soar. Older Australians appear more likely to keep up their cover, but are disproportionately punished each time insurance increases because of their sheer numbers.


Opinion: Government letting insurers run rings around retirees

The bulk of retirees and pensioners have weathered rises of thousands of dollars for private health insurance in the past seven years. This week’s boast by Health Minister Greg Hunt that next April’s rise would be less than last year’s was as empty as most of our wallets, because the hike will still be twice as much as the increase in the cost of living.

To say it is a huge disappointment that the Federal Government hasn’t followed through with promises to shake-up the health insurance sector is an understatement. What happened to the Government’s supposed determination to make insurance more affordable, transparent, and at the very least, accountable for its price increases?

Certainly, the corporate watchdog is wasting no time holding other insurers to account for shonky car insurance, as the Australian Securities and Investments Commission (ASIC) revealed yesterday. ASIC has ordered that Allianz and Suncorp refund nearly $63 million to those duped into buying useless vehicle insurance through car dealerships.

Shonky, or junk insurance, is also a huge rort in the private health insurance sector, as consumer advocates CHOICE revealed in July. The Government is playing favourites by letting that sector off the hook while (rightfully) clamping down on other insurers.

And as we have previously reported, the Australian Competition and Consumer Commission is a toothless tiger when it comes to mediating between policyholders and insurance companies. It knows that complaints to the Private Health Insurance Ombudsman (PHIO) are climbing exponentially. Yet the commission appears content with the ombudsman’s office reticence to steer the sector towards the right path. The PHIO admitted last year it “is focused more on negotiating outcomes … rather than assigning fault and applying a penalty or fine to one party”.

So, who is looking out for the little guy – especially older Australians – on the vexing issue of exorbitantly priced health cover?

To add salt to the wound, late last year, the Government also gave its blessing to health insurers that wanted to drop substantial cover for procedures such as hip and knee replacements and natural therapies, all of which bring great relief to older Australians in pain. What is the point of being privately insured when it presents as such a low value proposition?

Will this year’s increase in premiums force you to give up health insurance? Do you see any value in being privately insured? Should the Government allow ASIC to scrutinise the value of health insurance in the way it does with other types of cover?

Related articles:
Is your policy junk?
Can you get cheap insurance?
Cover becoming eroded

Written by YourLifeChoices Writers

YourLifeChoices' team of writers specialise in content that helps Australian over-50s make better decisions about wealth, health, travel and life. It's all in the name. For 22 years, we've been helping older Australians live their best lives.

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