These ‘sneaky’ health insurance tactics are costing you $2,000 a year
- Replies 8
Health insurance is supposed to provide peace of mind when you or a loved one needs medical care.
However, according to consumer advocacy group CHOICE, Aussies could be losing up to $2,000 per year due to 'sneaky tactics' used by major health insurers to increase premiums.
The report highlighted that the cost of top-tier and 'Gold' hospital policies has surged by over 30 per cent on average in the past three years.
This is a staggering increase, especially compared to the approved average 8.6 per cent increase in premiums reported by the Department of Health and Aged Care over the same period.
CHOICE Health Insurance Expert Jodi Bard stated: 'Health insurers are using sneaky tactics to inflate prices for people who need health insurance for things such as surgery, management of chronic pain, or end-of-life care.’
'Often, these are the people who can least afford higher premiums.'
The report analysed the premiums of major health insurers, including HBF, Medibank, Newcastle Industrial Benefits (NIB), Bupa and Hospitals Contribution Fund of Australia (HCF), and found that their top-tier premiums have increased by 34 to 47 per cent over the past three years.
This was based on a comparison of policies in New South Wales (NSW) and Western Australia (WA), and the impact of these increases is significant.
For instance, a family in NSW who paid, on average, $5,380 for a Gold hospital policy (with a $750 excess) per year in 2021 now pays a whopping $7,090 each year.
'That was already quite a big chunk of money. But nowadays if you look at the cost of living increases, that’s not affordable for everybody anymore,' CHOICE Health Insurance Expert Uta Mihm said.
The report also found that insurers were using tactics that allowed them to increase policies by closing existing policies and opening new ones with 'essentially the same cover' at a higher price.
This is a practice that is not illegal, but it is certainly questionable.
‘Health insurers can close and open policies at any time, there’s no law against it,’ Ms Mihm stated.
‘What is sneaky is that they have closed affordable policies and then introduced new policies for new customers.’
‘So the old customers might still be on those old policies, but eventually, they might be moved over to a new policy that has increased dramatically in price,’ she explained.
CHOICE also noted that some funds don't clearly advertise cheaper Gold policies on their website and instead promote their newer, pricier policies.
This lack of transparency makes it difficult for consumers to make informed choices about their health insurance.
However, the CEO of Private Healthcare Australia, Dr Rachel David, has disputed CHOICE’s claims, stating that premiums are increasing because the cost of healthcare is increasing.
'Health funds are doing all they can to support their members facing cost of living pressure. They don’t want to increase premiums by a single dollar, but the health system is not immune from inflation,' she said.
‘It is increasingly difficult to offer affordably priced Gold cover to members due to the high and growing costs this category must cover, including psychiatric services, weight loss surgery, fertility treatments, and pregnancy and birth,’ Dr David added.
Additionally, Dr David stated that the increase was due to inflationary pressures, record claims, and necessary upgrades to prevent cyber attacks.
‘The cost of medical and hospital services increased 5.9 per cent this year, and there’s been a 9.6 per cent surge in hospital admissions funded by insurers,’ she explained.
‘This is putting pressure on premiums.’
In December, Health Minister Mark Butler rejected a request from 31 insurers for an average increase of up to six per cent—the biggest premium hike in at least six years.
He insisted the funds go back to the drawing board and come up with a more reasonable figure.
‘Based on the information currently provided by private health insurers, I am not inclined to approve their proposed premium increases,’ the minister expressed.
‘I’ve written to every private health insurer, directing them to have another go and put forward a more reasonable figure that considers their years of record profits and the declining proportion of premiums they return to customers, particularly while household budgets are under pressure,’ he continued.
With the government set to announce this year’s health insurance increase in the coming weeks, CHOICE encourages Aussies to shop around for the best deal.
'There’s savings for a single person of more than $1,000 if you shop around and find the cheapest available Gold compared to the most expensive Gold,' Ms Mihm advised.
She suggested considering smaller and more exclusive membership funds.
‘It doesn’t matter if it’s a fund that you have never heard about, health insurance is all regulated,’ she assured.
‘Smaller funds, and especially the restricted funds, which are available for a wide group of people like teachers, reservists, police and emergency workers, quite often have really good deals.’
What are your thoughts on these 'sneaky' health insurance tactics? Have you experienced a significant increase in your premiums? Share your experiences in the comments below.
However, according to consumer advocacy group CHOICE, Aussies could be losing up to $2,000 per year due to 'sneaky tactics' used by major health insurers to increase premiums.
The report highlighted that the cost of top-tier and 'Gold' hospital policies has surged by over 30 per cent on average in the past three years.
This is a staggering increase, especially compared to the approved average 8.6 per cent increase in premiums reported by the Department of Health and Aged Care over the same period.
CHOICE reported that Aussies are losing $2,000 due to sneaky health insurance tactics. Image source: Leeloo The First/Pexels
CHOICE Health Insurance Expert Jodi Bard stated: 'Health insurers are using sneaky tactics to inflate prices for people who need health insurance for things such as surgery, management of chronic pain, or end-of-life care.’
'Often, these are the people who can least afford higher premiums.'
The report analysed the premiums of major health insurers, including HBF, Medibank, Newcastle Industrial Benefits (NIB), Bupa and Hospitals Contribution Fund of Australia (HCF), and found that their top-tier premiums have increased by 34 to 47 per cent over the past three years.
This was based on a comparison of policies in New South Wales (NSW) and Western Australia (WA), and the impact of these increases is significant.
For instance, a family in NSW who paid, on average, $5,380 for a Gold hospital policy (with a $750 excess) per year in 2021 now pays a whopping $7,090 each year.
'That was already quite a big chunk of money. But nowadays if you look at the cost of living increases, that’s not affordable for everybody anymore,' CHOICE Health Insurance Expert Uta Mihm said.
The report also found that insurers were using tactics that allowed them to increase policies by closing existing policies and opening new ones with 'essentially the same cover' at a higher price.
This is a practice that is not illegal, but it is certainly questionable.
‘Health insurers can close and open policies at any time, there’s no law against it,’ Ms Mihm stated.
‘What is sneaky is that they have closed affordable policies and then introduced new policies for new customers.’
‘So the old customers might still be on those old policies, but eventually, they might be moved over to a new policy that has increased dramatically in price,’ she explained.
CHOICE also noted that some funds don't clearly advertise cheaper Gold policies on their website and instead promote their newer, pricier policies.
This lack of transparency makes it difficult for consumers to make informed choices about their health insurance.
However, the CEO of Private Healthcare Australia, Dr Rachel David, has disputed CHOICE’s claims, stating that premiums are increasing because the cost of healthcare is increasing.
'Health funds are doing all they can to support their members facing cost of living pressure. They don’t want to increase premiums by a single dollar, but the health system is not immune from inflation,' she said.
‘It is increasingly difficult to offer affordably priced Gold cover to members due to the high and growing costs this category must cover, including psychiatric services, weight loss surgery, fertility treatments, and pregnancy and birth,’ Dr David added.
Additionally, Dr David stated that the increase was due to inflationary pressures, record claims, and necessary upgrades to prevent cyber attacks.
‘The cost of medical and hospital services increased 5.9 per cent this year, and there’s been a 9.6 per cent surge in hospital admissions funded by insurers,’ she explained.
‘This is putting pressure on premiums.’
In December, Health Minister Mark Butler rejected a request from 31 insurers for an average increase of up to six per cent—the biggest premium hike in at least six years.
He insisted the funds go back to the drawing board and come up with a more reasonable figure.
‘Based on the information currently provided by private health insurers, I am not inclined to approve their proposed premium increases,’ the minister expressed.
‘I’ve written to every private health insurer, directing them to have another go and put forward a more reasonable figure that considers their years of record profits and the declining proportion of premiums they return to customers, particularly while household budgets are under pressure,’ he continued.
With the government set to announce this year’s health insurance increase in the coming weeks, CHOICE encourages Aussies to shop around for the best deal.
'There’s savings for a single person of more than $1,000 if you shop around and find the cheapest available Gold compared to the most expensive Gold,' Ms Mihm advised.
She suggested considering smaller and more exclusive membership funds.
‘It doesn’t matter if it’s a fund that you have never heard about, health insurance is all regulated,’ she assured.
‘Smaller funds, and especially the restricted funds, which are available for a wide group of people like teachers, reservists, police and emergency workers, quite often have really good deals.’
What are your thoughts on these 'sneaky' health insurance tactics? Have you experienced a significant increase in your premiums? Share your experiences in the comments below.
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