Survey reveals cost of private health insurance as biggest household spending concern
Australian households are worried about how the changes on April 1 will affect them
A recent Choice quarterly survey has revealed that the biggest household spending worry is the cost of private health insurance.
Previously, concern over electricity bills was in the lead, but the new survey has discovered that 82 per cent of households see health as their primary spending concern, beating 77 per cent concerned about electricity.
Thousands of Aussies have been left scratching their heads at the confusing new reforms coming into effect on April 1, 2019, with the changes tipped to be the largest the industry has seen for over a decade.
Across Australia, all existing hospital policies will be consolidated into four tiers: Basic, Bronze, Silver and Gold, each with minimum levels of cover. The biggest concern is that some Australians might be left with reduced levels of cover, without understanding the changes or how it affects them.
Grattan Institute’s Health Program director, Stephen Duckett, has spoken out about the changes. “It’s to make it easier for consumers to choose between the various packages,” he explained. “At the moment there are so many packages on offer and they have so many different definitions that it’s impossible.”
What am I covered for?
The simplest way to think about it is this: The higher the tier, the more you’re covered for.
Bronze covers a variety of procedures, such as chemotherapy and gynaecology. Silver covers everything in Bronze, but includes extras such as lung, chest and dental procedures. Gold is the highest cover you can buy, which includes everything in Bronze and Silver, as well as extras such as pregnancy, IVF, joint replacements and cataract surgeries.
Some insurers will also be able to offer additional benefits above the minimum tier requirements, classified under Basic Plus, Bronze Plus, Silver Plus and Gold Plus.
“It’s not surprising that the wider Australian community is confused and concerned by the incoming changes,” said Jonathan Leane, Founder of Health Insurance Comparison. “Thousands of households have received letters from their insurers, detailing the new system and incoming changes to their policies.”
“Some people will be experiencing really significant changes, especially when a service they were using is no longer covered by the tier they’re now on. At the same time, premiums have increased, putting more pressure on peoples’ wallets,” explained Leane.
46 per cent of Australian citizens have hospital cover, and 55 per cent hold extras cover. With no uniform requirements across insurers, additional benefits will vary between providers. The rise in cost is also set to affect pensioners, who already struggle to afford private health cover.
Other changes expected from April 1
Sixteen natural therapies, including yoga, pilates, feldenkrais, kinesiology, homeopathy and naturopathy, will no longer be covered by private extras.
Additionally, insurers will be able to offer:
- Discounts for young people aged 18 to 29
- Higher excesses of up to $750 per person in exchange for lower premiums
- Paying travel costs of people who have to travel long distances to come for hospital treatment
Aussies have been vocal about how the incoming changes might affect their lives and businesses, with many complaining that without the natural therapy rebate, they won’t be choosing to take out health cover.
However, the government has announced that there is not enough evidence currently available which proves the effectiveness of natural therapies, and excluding them will dramatically reduce premiums. Currently, Aussies are spending $200 million a year to cover natural therapies.
Though the changes have been devised to further clarify elements of available cover, it’s become apparent that Australians will need assistance to fully understand the changes, and transition to the new policy framework. Insurers have until April 1, 2020 to fully implement the changes.
Health Insurance Comparison believes that now is the perfect time to compare. “With the number of changes coming in, we don’t expect everyone to understand what it all means. We have a panel of advisers on call to help Australians understand how their policy could be changing, and to help find them a better deal if there is one available,” Leane clarified.
“Comparing is in your best interest, otherwise you could end up paying more and receiving less cover. Everyone wants to make sure they’re getting a fair deal, and you shouldn’t blindly trust that the policy you’ll be moved to is the one you need”.
If you’re worried about the incoming changes, Health Insurance Comparison is here to help. The best part is that our team of trusted advisers can do the hard work, and leave the decision-making up to you. Thousands of Australians have already jumped on board. Get in before April 1, and discover how much you could be saving.