00:02Private health insurance premiums are set to rise on average more than 4% from April after the government finished
00:09its annual negotiations with the industry.
00:11It's the highest rise since 2017.
00:14Previous increases have seen some people reduce their cover with some thinking of dropping their private health cover altogether.
00:21With more, here's Dr. Elizabeth Devaney from the head of the Consumers Health Forum.
00:26Elizabeth, welcome.
00:28Thanks, Rose.
00:28So what do you think of the increases in premiums that are coming in April?
00:33So Australians understand inflation.
00:36What they want to know, though, is if the price is going up, they're getting better value.
00:40We all understand value.
00:42Are we paying less out-of-pocket costs?
00:44Are our policies covering us more carefully?
00:48Do we even understand what it is we're covered for?
00:51And are many people dropping their level of cover or thinking of giving it up completely?
00:57So we have seen in recent months that the level of coverage has dropped and we would expect to see
01:02that will occur again.
01:03Australians are telling us that they really can't afford their cover.
01:07And equally importantly, they're frightened to use it because they have no clue what their out-of-pocket costs will
01:14be and they think they can't afford them either.
01:16Why don't they know what the out-of-pocket costs are?
01:21Well, when you go and seek help for a procedure, you'll go to, say, I don't know, a surgeon, and
01:26they might tell you what their costs are, but then you'll need to know also what the costs are of
01:31the anaesthetist, what the scans might cost, what the medicine might cost, how long you'll be off work.
01:35No one gives you one price and one quote, as you'd expect in most other parts of our economy.
01:41So it's an issue of transparency?
01:43Absolutely.
01:44So people have the cover, but they just don't use it because they're just not sure what they're covered for.
01:49And sometimes they can't understand the policy.
01:52I mean, if you need to be a lawyer to understand your policy, we have a problem.
01:56What are the tax implications, Elizabeth, for giving up private health cover completely?
02:01Well, it does depend what you earn, but for some people will be told by their financial advisors that insurance
02:07is just as good an option for them as paying more of the Medicare levy.
02:11Unfortunately, some of the policies that people choose, which are in the lower end, don't offer a lot of coverage.
02:18And then when they do need to use this policy, they discover that might have been paying for it, but
02:21it doesn't actually meet their needs.
02:23So if people are thinking of dropping their level of cover or they have existing level of cover, what do
02:28they have to be aware of and check?
02:30What questions should they be asking their provider?
02:34So it's really good to stop and think what I might like to use or might have to use in
02:39the next five or 10 years.
02:41Often looking at what's happened in your family will give you a bit of an idea.
02:43And then checking to see whether the policy you've got or that you're looking at would be likely to cover
02:48off on those things.
02:49The federal government has a great website, privatehealth.gov.au, which can walk you through some of this.
02:56You can do your own reviews, of course, and ask questions.
03:00Don't be frightened to ask questions of the insurers about what's covered and what's not.
03:04The same question for people who are considering dropping private health care altogether and be solely reliant on the public
03:10health sector.
03:11What do they need to think about and to balance up?
03:15Yes, so sometimes people have private health insurance because they want a shorter waiting time or choice,
03:21but sometimes they need it because the services they will require are not available in the public system.
03:26That's why it's important to understand what you might need and make sure you'll be able to get that through
03:31the public system if you need it.
03:33How do you find that out?
03:35Yeah, that's right.
03:36I mean, we have this amazing health care system, but no one ever teaches you about it.
03:40So you could talk to your GP would be a good start or whoever it is that looks after you,
03:44your health care providers,
03:45and ask them what you're likely to need and whether or not a public service is available.
03:51They'll often be good starting points to give you clues.
03:54Why is health cover so complicated, Elizabeth?
03:57Yeah, that's a very good question.
04:00Consumers are well aware that it's hard to work out what they're covered for and what they might have to
04:05pay.
04:05And we would say that reforms that don't address this are really not helping our community.
04:11The price goes up, but yet you still don't really know what you're covered for.
04:15And we're really calling for if you're going to increase premiums or let's close those loopholes.
04:20Let's make it clearer what I'm covered for and ideally extend my coverage.
04:24So there are calls for price benchmarking and an independent regulator.
04:29Would you like to see either or both of those things?
04:33I think what the community wants is to be able to trust the system.
04:36They're not concerned so much about the mechanisms as the outcomes.
04:40Is it reliable?
04:41Can they know if they've got a policy, what they'll be paid for?
04:44Do they know there'll be no gap or a known gap?
04:46That's what people want to know.
04:48Dr Elizabeth Devaney, thank you so much.
04:51Thanks, Roz.
04:53Thank you so much.
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