For selling 'cover' that leaves you exposed
What can we say about private health insurance (PHI) – except that the entire sector is in shambles and the product itself often delivers little value for money.
In a recent CHOICE Consumer Pulse survey, PHI topped the list of Australia's money-related worries, and young people are bailing out of the product in droves. That's no surprise, really, given that many policyholders get hit with big out-of-pocket costs even after they've paid top dollar for cover year after year. And, of course, the cost of private cover just keeps going up.
After much consultation, the government recently attempted to simplify this ridiculously complicated market from April this year, but the industry relies on confusion to sell bad-value products and has found ways to keep their confusopoly. The result? The many intricacies of the new Gold, Silver, Bronze and Basic tiered system make it every bit as confusing as the mind-boggling mess that preceded it.
Private health insurance in general has issues, but junk health insurance – which gives you very little beyond what's already provided free through our national healthcare system – should really be outlawed.
Medibank's Basic Accident and Ambulance cover is Exhibit A.
When Medibank says 'basic', what they really mean is 'basic rip-off'. We've found Basic policies from Medibank that are more expensive than some Bronze policies from the next tier up.
The cases vary from state to state, but their Basic Accident and Ambulance ($500 excess) policy, for example, is more expensive than the cheapest Bronze in six states we looked at (NSW, ACT, NT, SA, WA and Tasmania).
It costs more and it delivers less, which is what gives this slippery financial product its special sheen of shonkyness.
Basic policy – $109.65/mth
Medibank Accident and Ambulance
Covers: Treatment following an accident; limited cover for rehabilitation, palliative care and hospital psychiatric care.
Bronze policy – $99.16/mth
Westfund Bronze Hospital
Covers: What the Basic policy covers, plus: blood; bone, joint and muscle; brain and nervous system; breast surgery; chemotherapy, radiotherapy, immunotherapy; dental surgery; diabetes management; digestive system; ear, nose and throat; eye (not cataracts); gastrointestinal endoscopy; gynaecology; hernia and appendix; implantation of hearing devices; insulin pumps; joint reconstruction (not replacements); kidney and bladder; male reproductive system; miscarriage and termination of pregnancy; pain management (without device); podiatric surgery; skin; sleep studies; tonsils and adenoids.
NOTE: Above premiums are for singles policy in Tasmania, before government rebate.