The Health Insurance Dilemma in Australia: What You Need to Know
In Australia, approximately 15 million individuals are currently paying for private health insurance. However, a large segment of these policyholders—nearly 40%—have not submitted a claim in the past year. As premiums escalate and living costs rise, many Australians are contemplating dropping or scaling back their health insurance coverage. Experts, however, caution against such decisions.
Petrus Buys, a 29-year-old civil engineer from South Africa, recently obtained health insurance for his family after the birth of his son, Caleb, last year. He hesitated initially but recognised the necessity of coverage upon embracing parenthood. "Returning home from the hospital, I realised that my responsibilities extend beyond just my wife and myself," Buys commented.
He secured a hospital and extras policy with HCF shortly after Caleb’s birth, using a comparison tool from iSelect. Buys pays $100 monthly, totalling $1,200 annually. Though he hasn’t needed to make a claim, he believes the investment is justified, especially for crucial services like dental care not covered by Medicare. "The peace of mind it provides is worth every dollar spent," he added.
New research from Finder indicates that 40% of Australians with health insurance haven’t made a claim within the last 12 months, despite disbursing significant sums in premiums. In fact, a substantial 38% did not utilise either hospital or extras cover, while only 17% of respondents claimed on both within that period.
Health insurance expert Tim Bennett pointed out that while a safety net for unexpected health issues is invaluable, many may feel as though their contributions amount to "dead money." He encourages policyholders to maximise the benefits of their coverage by utilising services like dental check-ups and physiotherapy.
The rising cost of living is forcing many Australians to reconsider routine health checks. Research found that 33% of the populace is delaying various screenings, while 31% are postponing visits to general practitioners (GPs). Additionally, an average increase of 3.73% in private health insurance premiums has led one-third of policyholders to contemplate cancelling or downgrading their plans.
Buys acknowledges the financial strain following the birth of his child and the decreased income from his wife’s reduced work hours. "We are allocating around 40% of our income to our mortgage," he shared. Coupled with escalating grocery prices and essential utility costs, the family has begun to limit discretionary spending on activities like vacations.
"Working as the primary income provider, I’m being pushed to consider additional roles or side hustles to bolster our finances," he said, revealing the pressure many Australians are under.
Bennett cautioned that while it may be tempting to forgo health insurance, the risk of being uninsured during a health crisis far outweighs the potential savings. He advocates for conducting an insurance cost audit to ensure that policies align with individual needs and financial realities. "Now is an opportune moment to shop for health insurance as companies vie for customers ahead of the new financial year."
As Buys anticipates the renewal of his health insurance plan, he intends to reassess his coverage and look into claiming benefits for dental and optical appointments.
In summary, while many Australians are struggling with the escalating costs of living and health insurance premiums, it’s crucial not to underestimate the value of having cover in place. By leveraging available benefits and carefully evaluating existing policies, consumers can ensure they receive their money’s worth while maintaining necessary health protections.
