Consumers are being ‘scammed’

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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Written by Janelle Ward

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