Private health insurance affordability a significant concern for consumers says ACCC


Household spending on policies has increased over the last decade.

The growing unaffordability of private health insurance is leading Australian consumers to opt for low-cost policies with lower benefits according to a report released by the ACCC today.

Australian consumers dropped approximately 400,000 hospital policies with no exclusions between June 2014 and June 2016. In that same period, Australian consumers took out 600,000 policies with exclusions.

The report also highlights that the rise in complaints about private health insurance could be a result of complex policy information.

Affordability is a significant concern for consumers.

The report said that the average out-of-pocket hospital expenses was up by 6.9%, while the average out-of-pocket extras cost rose by just 0.7%.

“It is in the interests of both insurers and their customers to be clear and transparent about policy offerings. This helps people to make informed decisions about the level of insurance cover they need and can afford,” ACCC deputy chair, Delia Rickard, said.

Complaints to the Private Health Insurance Ombudsman (PHIO) have been steadily on the increase. In 2015-16, over 30% of the complaints lodged with the PHIO were in regards to benefits paid by insurers. The majority of these complaints stemmed from confusion over exclusion and restrictions.

Overall complaints increased by 3.5%. While this signals the third consecutive year complaints to the PHIO have risen, 2015-16 experienced the smallest year-on-year increase. Complaints for the 2013-14 period rose by 16% while complaints for the 2014-15 period increased by 24.5%.


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