In Australia, private health insurance is something we don’t always think about thanks to our reliable public health system. However, in the lead up to the end of the 2017/18 financial year, there was a lot of noise about getting signed up to an insurer for the financial benefits.
“health insurance is one of those things that’s important to have in case something goes wrong,” says Graham Cooke, Insights Manager at Finder.com.au. “In an ideal world, you’ll never have to claim on your health insurance, but the purpose of it is so if you do get sick unexpectedly, your insurance can help cover the bill.”
But, how do you know if private health insurance is right for you? One way is taking a look at the number of Australians who currently have private health insurance, and what they’re getting out of their policies versus what they’re paying for them. “Many Australians feel their cover is too expensive,” says Graham. “If this is the case, it’s important to compare policies online to ensure you’re getting the best value for your money and personal situation.”
According to an analysis of the May 2018 APRA data by Finder, around 45.5 per cent of Australians have private health insurance. That’s a bit more than 24.8 million people. Of that, around 13.5 million people have extras cover, and about 11.3 have hospital cover, making extras cover the more popular choice. In fact, Finder also found that one in five Australians had abandoned their hospital cover because it was too expensive, and a further 16 per cent had cancelled their extras cover for the same reason. So, how much does private health insurance cost?
The research found that the average annual private health insurance policy costs roughly $3522 per person, and of the 11.3 million Australians paying for hospital cover, only 4.6 million made a hospital treatment claim between 2017 and 2018.
It appears that those paying for extras cover are getting significantly better value for money, with 93.9 million claims being made against policies last year – that’s nearly 7 claims per policy.
The majority of Australians still put their faith in the public health care system, regardless of the Medicare Levy and Surcharge that may loom over their tax returns, or the risk of falling sick unexpectedly. However, for those Australians with private health insurance, extra cover seems to be the most popular option with the best value for money.
How to cut costs on your health insurance:
- Don’t pay for unnecessary extras like remedial massages and partial gym memberships if you won’t use them. Cutting unnecessary extras from your cover is a great way to save you money.
- Compare and switch funds. Aussies don’t frequently switch health insurers, with most of us staying with the same provider for an average of 11.8 years. However, if your insurer is no longer giving you the value that you need in a policy, then maybe it's time to switch.
- Consider making a policy change. If leaving your provider altogether is off the cards, then making changes to your existing policy is another way to get more value from your insurer.
- Don’t set and forget. Review your needs and your policy rgularly to make sure they are still aligning with your needs and situation. For example, there is no point in paying for pregnancy cover if you aren’t planning on having more children.
- Make the most of discounts – Many health insurers offer big discounts around EOFY and these deals aim to keep existing customers and to entice new ones.
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