Health insurance system a mess: Choice

Choice advises against amending health insurance plans before April changes

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IN THE HIP POCKET: Around 82 per cent of Australians are worried about the cost of health insurance with changes to the system to be introduced in April.

IN THE HIP POCKET: Around 82 per cent of Australians are worried about the cost of health insurance with changes to the system to be introduced in April.

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Households are now more concerned about health insurance costs than electricity.

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HEALTH insurance costs are now the main financial concern for households.

The quarterly national survey by consumer watchdog Choice revealed 82 per cent of households were concerned about health insurance costs, placing them above electricity costs (77 per cent) for the first time.

In April, the health insurance industry is set to undergo the biggest change it has seen in decades when a new Gold, Silver, Bronze system will be introduced.

Choice has received more than 1700 health fund letters from concerned Australians, but its insurance experts have warned people not to rush into policy changes.

"We asked our Choice community to pitch in and help us understand these changes. What we found was a health insurance system in a state of mess," Choice spokesman Jonathan Brown said.

"It's frankly dishonest for anyone to say they can provide a true comparison of the health insurance market right now.

"These changes are big and no one really knows the true impact on the overall market until after April 1.

"That's why we're shocked to see commercial comparison sites still pushing their services."

New policies will be released over the coming weeks and months that will change in coverage and price.

Choice experts have issued a number of warnings and tips including:

  • People expecting a particular health need such as pregnancy or hip replacements, should check their policy before changes come into effect and switch cover if the procedure is no longer covered.
  • People currently undergoing treatment, who have surgery booked or are pregnant, should check to see if the cover changes will affect them.
  • The range of policy options will change after April 1 and what seems like a good deal now may not be good value after changes are made.
  • The average premium increase is 3.25 per cent, but Choice has seen a number of letters which show higher costs and fewer benefits.
  • If possible, pre-pay the best deal available for the coming year now. If a better policy becomes available after April 1, refunds will be available for pre-paid premiums.

"From the 1700 letters we received, we've found that the system that was meant to simplify health insurance is causing widespread confusion and stress," Mr Brown said.

Financial comparison website Canstar has also weighed in on the debate, saying its new report found 80 per cent of Australians with health insurance did not know what the changes were or how they would impact them.

The report found 75 per cent of policy holders said they had not been contacted by their insurer or were unsure if they had been contacted.

For more information, click here.

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