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More Australians are downgrading or dropping their private health cover due to continually rising premiums, according to Australia’s competition watchdog.
The Australian Competition and Consumer Commission said that despite an increase in premiums paid in the last financial year, there was a slight decline in the number of people with hospital-only or combined health cover in their private health insurance.
In its annual review of the private health insurance industry, ACCC revealed that $23.9bn in premiums was paid out last year, $834m more than in 2016/17 – but the number of policyholders with hospital or combined health cover dropped 0.9% to 45.1%, and those with extras-only cover rose 0.3% to 9.2%, the Australian Associated Press reported.
ACCC said many are also opting for policies with either lower cost with exclusions or have an access with copayments option, as policies with exclusions rose 44% from 40%, while hospital policies with excess increased 0.1% to 84%.
“People are increasingly feeling the pinch of private health premium increases and growing gap payments,” Delia Rickard, ACCC deputy chair, told AAP. “In response, many are shifting to cheaper products with reduced coverage, and some are dropping their cover altogether.”
During the year, private health insurers forked out $15.1bn in hospital benefits and $5.2bn in extras treatment benefits.
Rickard also issued a warning to private health insurers as the implementation for new health insurance reforms loom close.
“Private health insurers need to be transparent about what is and isn’t included in their policies or risk losing their customers’ trust and, ultimately, their business,” Rickard told AAP.
