News Life and Health28 May 2018

Australia:More Aussies abandon private health insurance

28 May 2018

A quarter of a million Australians did not renew their private health insurance in the past year, new findings from a survey by the market research firm Roy Morgan shows.

The survey involving 50,000 face-to-face interviews every year found 256,000 Australians who had health insurance at some point in their lives chose not to renew it in the year to March 2018.

This is "significantly" up from 182,000 Australians in the same period the previous year.

"This research has shown that, apart from the cost of health insurance being a major problem for customer retention, it should be related to the perceived benefits or value of paying increasingly high premiums," Roy Morgan analyst Norman Morris said.

Among those who chose not to renew, 53% said it was because health insurance was too expensive, up from 47% the previous year.

The latest government-approved premium increase of 3.95% means that policyholders have been hit with a 70% cumulative price rise since 2008.

Nineteen percent said out-of-pocket costs were too great, up from 13%; and 16% said universal health scheme Medicare was more than sufficient for their needs, up from 5%.

11% said that service was poor compared to 2.3% previously.

Change in family circumstances/marital status showed a fall 9.7% compared to 18.4% previously.

Ms Rachel David, chief executive of peak body Private Healthcare Australia, said all insurers agreed the major issues were rising premiums and out-of-pocket costs.

"The only way to reduce premiums meaningfully is to reduce wasteful input costs. The government has made a start by implementing long-awaited reductions in inflated medical device benefits but there is more work to be done," she said.

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