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Health insurance rip off

CHOICE says Australians are risking their health as insurance prices spiral

13 June 2013

A CHOICE investigation into the Australian health insurance industry looking at thousands of health insurance* policies has found that 19% of health expenditure comes directly from the pockets of Australian consumers and isn’t rebated by Medicare, which is the highest contribution of all English-speaking countries.

The news comes following a hike in health insurance premiums last month of 5.6% on average, taking Australians contributions to twice that in the United Kingdom. It also follows the change on 1 July last year that saw Australians who earn more than $84,000 (single) or $168,000 (couple/family) ineligible for the full 30% Private Health Insurance Rebate.

“Worryingly, since means testing was introduced for the private health insurance rebate the CHOICE investigation uncovered a trend 2 in consumers downgrading their level of cover to accommodate increased costs,” says CHOICE spokesperson Tom Godfrey.
“The news gets worse for consumers who prepaid before 30 June last year as they will for the first time experience the full bill shock as we head into premium renewal season. Also, from 1 July they’ll no longer receive the private health insurance rebate on the lifetime health cover (LHC) component of their premium.”
 
“The investigation found that 14,000 people have applied to access their superannuation savings to pay for health costs, a move that should concern health and welfare agencies and is a potential indicator of those with chronic illnesses struggling with to stay afloat.”
 
The CHOICE investigation highlights a concerning trend in Australian healthcare where the most vulnerable consumers are facing dramatic health insurance premium price rises for policies that compromise their health and financial security.” 

The good news is there are some simple things consumers can do to offset the impact of the prices rises and the policy changes:
 
CONSUMER CHECKLIST
Review your extras cover
Take a look at your Hospital Cover and ask yourself why you have it. Is it for tax or health?
Check for a discount for paying annually or direct debit
Visit privatehealth.gov.au and choice.com.au

Compare Policies
Check whether you qualify to join a restricted membership fund
Beware of lifetime limits (some funds have them for orthodontics) and combined annual limits
Our analysis of health insurance finds that top-cover policies with an excess or co-payment provide better value than medium-cover policies
 
HOW TO SWITCH FUNDS
  1. Get a detailed quote
  2. Ask for the cover to start only when the old cover is cancelled
  3. Clearance certificate
  4. Itemised claims statement (make a copy and send to new fund)
  5. Cancel direct debit with fund and your bank 
Health funds reviewed
AHM
Australian Unity
BUPA
Central West
CUA
GMF
GMHBA
HBF
HCF
Health.com.au
HIF
Health Partners
Latrobe
Medibank Private
NIB
Peoplecare
Queensland Country Health Fund
St Lukes
Westfund

[1] The thousands of health insurance policies reviewed include hospitals and extras. 

[2] Since means testing was introduced for private health insurance rebate on 11 July 2012, Insurers have told CHOICE they’re seeing a trend in customers downgrading their level of cover to accommodate increased costs.

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