High number of people downgrading hospital cover
According to figures from the Australian Prudential Regulation Authority (APRA) over half a million Australians downgraded their level of private hospital cover in the 2014-15 financial year, representing a drop in the region of 500,471 policies.
Over the exact same period, 558,619 exclusionary policies were taken up the same time, representing a significant 48.1 per cent growth in that category. Exclusionary policies don’t offer the same comprehensive coverage and are naturally less expensive as the other level of cover.
Exclusionary polices offer a medium to basic level of cover that includes some in-patient treatments but not everything across the board and common exclusions include treatment for pregnancy and birth-related services, treatment for joint replacements and other procedures like dialysis.
Consumer advocate group CHOICE suggest that many people find exclusionary policies suitable as they don’t have to pay higher premiums for treatments they are unlikely to use and a basic level of hospital cover can actually represent an attractive tax strategy.
But Federal Health Minister Sussan Ley is encouraging consumers to remain wary and suggest that many consumers are at risk of being caught out by “junk” policies.
Ms Ley told CHOICE, “This government is committed to recalibrating the private health system so that value for money for consumers returns to being its core focus and we're interested in the views of everyday Australians on how best to do that.”
APRA figures have shown that the proportion of Australians with private hospital cover is growing from 43.9 per cent in 2007 to 47.4 per cent in 2015, albeit slowing somewhat as insurance premiums have continued to grow, increasing by as much as a third since 2010.
With an announcement of a 5.59 per cent increase in private health insurance premiums from April 1 this year it’s increasingly important for consumers to be wary when choosing their policy.
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