In Australia, around 15 million individuals hold private health insurance, yet a significant number have not lodged a claim in the past year. With insurance premiums on the rise and the escalating cost of living, many Australians are contemplating whether to downgrade or cancel their health insurance altogether. However, experts advocate for more considered decision-making in this regard.
Petrus Buys, a 29-year-old civil engineer who migrated to Australia from South Africa two years ago, secured health insurance for his family in November, shortly after the birth of his son, Caleb. Initially hesitant about the need for insurance, the new father recognised the crucial responsibility he had taken on. He stated, “Coming home from the hospital, I realised I wasn’t just caring for myself and my wife anymore.”
Buys opted for a hospital and extras policy with HCF just two days following his son’s birth. Using comparison website iSelect, he now pays $100 a month, totalling $1,200 a year, for his coverage. Despite having yet to make a claim, he considers the peace of mind offered by his health insurance vital, especially for services not covered by Medicare, such as dental care. Buys expressed, “For $100 a month, I can sleep well knowing I’m covered for critical services.”
Research from Finder highlights that nearly 40% of Australians with health insurance have not made a claim in the last year, even while incurring significant premiums. Within the surveyed group, 38% reported not using either their hospital or extras cover, while 32% only used extras like dental or physiotherapy. Merely 17% of the 1,013 individuals surveyed claimed on both hospital and extras coverage.
Tim Bennett, a health insurance expert at Finder, pointed out that while health insurance serves as a safety net for unforeseen health issues, many feel as though they are wasting money on premiums. He urged policyholders to utilise their benefits, noting, “Claiming for dental check-ups, physio appointments, or optical rebates can significantly increase the value of your policy.”
Given the financial burden of rising premiums—averaging a 3.73% increase in April—many Australians are postponing routine health checks. Research from iSelect indicates that 33% of Australians are delaying necessary appointments for dental, hearing, and cancer screenings, with 31% postponing GP visits. Additionally, one-third of policyholders are contemplating reducing or cancelling their insurance.
Buys admitted to feeling the financial strain brought about by higher living costs, particularly after becoming a parent and with his wife working fewer hours. “We bought a house about a year ago, and we are spending about 40% of our income on the mortgage,” he recounted. Alongside housing costs, he noted the increases in groceries and household bills. “We are definitely cutting back on leisure activities, like holidays or visiting family in South Africa.”
Bennett cautioned against discarding health insurance entirely. He remarked, “No one wants to be caught without cover when they genuinely need it.” He encouraged Australians to review their health insurance coverage, stating, “Now’s a good time to audit your costs. Don’t waste another year paying excess for a policy that fails to meet your needs.”
Buys plans to reassess his health insurance when it comes up for renewal and intends to claim for a dental check-up and an optometry visit.
In summary, while private health insurance remains a critical aspect of safeguarding health, many Australians face difficult choices due to rising costs and economic pressures. It is worth noting that maintaining coverage offers essential peace of mind, especially during these challenging times, and leveraging available benefits could greatly enhance the value received from such policies.
