Is your private health insurance policy ‘junk’?

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The Australian Medical Association (AMA) is calling on the Federal Government to ensure all healthcare policies contain a minimum level of cover and to make ‘junk’ policies illegal.

According to Mick Bellairs from Consumer Action Law, “junk insurance is industry jargon for ‘consumer credit insurance’, which takes the form of add-on insurance, gap insurance and extended car warranties. It is sold in with car loans, credit cards and personal loans. Often consumers don’t even know they have it, or couldn’t even make a claim even if they wanted to, as the insurance was mis-sold.”

AMA president Michael Gannon has run out of patience with private health insurers and said there is a proliferation of junk policies which are worth nothing more than the paper they’re written on purely designed so people could avoid the tax penalty.

“Private medicine is under siege and, in many ways, that’s because, very quickly, the community is losing faith with their private health insurance, which underpins most visits to private hospitals,” said Mr Gannon.

“And we seem to be seeing an orchestrated campaign by the insurers — an industry which is increasingly a for-profit industry — to deflect the blame from the real problems.

“And the real problems are that patients are getting sick and tired of finding out when they’re sick that their insurance isn’t good enough.”

Mr Gannon and the AMA are pushing for a streamlining of thousands of policies into simple gold, silver and bronze categories so people know what they are paying for. 

“There is a bewildering number of policies, and it worries us that this might be quite deliberate,” he said.

Private Healthcare Australia chief executive Rachel David disputes this suggestion. “the reason that there has been an increase in the number of products where some treatment areas are excluded is because consumers have been offering more bespoke products or products that are tailored to their life stage,” said Dr David.

Are you concerned that your policy may not cover you for the risks of your age and stage? Do you believe a simplified system as suggested by the AMA would make health insurance policies easier to understand? Do we really need more government regulation? 

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Written by Drew

Starting out as a week of work experience in 2005 while studying his Bachelor of Business at Swinburne University, Drew has never left his post and has been with the company ever since, working on the websites digital needs. Drew has a passion for all things technology which is only rivalled for his love of all things sport (watching, not playing).
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