Australians increasingly walking away from private health insurance

5 December 2018

The latest report to the Australian Senate prepared by the Australian Competition and Consumer Commission (ACCC) highlights that increasing numbers of Australian consumers are choosing to move to cheaper policies with less coverage or abandoning private insurance coverage altogether. 

This flight is being driven by a perceived lack of value and premium increases that are outstripping inflation and wage growth, with consumers also unhappy that rebates paid under health insurance policies are resulting in high out-of-pocket costs. 

Transparency is also an issue with the ACCC warning insurers that it expects them to provide “clear, prominent and timely communication with consumers” regarding Australian Government-mandated private health insurance reforms that come into effect on 1 April 2019. The ADA believes these changes do not go far enough and that they are unlikely to address the consumer concerns. 

While complaints to the Private Health Insurance Ombudsman may have decreased by 21 percent since June 2017, the ACCC notes that the number of complaints reached received in 2017-18 is the second-highest number for five years.  82% of complaints were about health insurers with 36 per cent of all complaints related to rebates paid. 

While the ACCC did not follow their normal methodology in preparing the report, it is clear that the data they sourced speaks to some of the same issues that the ADA would have raised if they had been consulted. 

The ADA will continue to try and bring about reforms that will prevent discriminatory rebates and supports calls for a Productivity Inquiry into private health insurance

To read the full report, go to Australian Competition & Consumer Commission