The government needs to overhaul its system to motivate more young people to buy private health insurance, the CEO of comparison website iSelect, Scott Wilson, has said.
He indicated that the declining participation rate in private health insurance is about to become serious, reported The Australian.
“We have now seen seven consecutive quarters of decline across the industry … the participation rate of the population with private hospital cover is now 46.5%,” he said.
Mr Wilson suggested the government should look at lifting the age for the lifetime health cover loading and offer extra rebate incentives to young people.
The government last month sent out about 280,000 letters to Australians who were uninsured, warning them that if they did not have hospital cover before their 31st birthday they would be hit with the lifetime loading.
“We call on the government to look at the current incentives. If we can’t address it over the next 12 months, we will have an issue in three to four years to deal with.”
He said that the participation rate in health insurance of people aged over 60 is 69%, compared with the average participation rate of 46%.
“We are concerned from an industry perspective that we are seeing a decline in younger people taking out private cover and that will have huge ongoing ramifications for the industry as they offset the cost of older Australians,” he said.