Bigger isn’t always better when it comes to private health insurance
hirmaa, the industry body representing 17 community based and member-owned health funds, says their premiums rise by less and are better value for money because they are focused on members and not on satisfying the financial needs of shareholders and overseas owners.
”The big three for-profit funds need to make a profit, it is expected by their shareholders and overseas owners and sometimes that involves not only putting up premiums, but cutting back on services covered,” hirmaa CEO Matthew Koce said.
“Member-owned and community based funds need to keep in surplus but only at a level that returns maximum value to members rather than shareholders.”
”There is no doubt that our insurers have policies that are better value than the big for-profits,” Mr. Koce said.
“When buying private health insurance, consumers need to be especially aware that many of the big for- profits are pushing policies that exclude potentially lifesaving procedures or impose big and unpleasant out pocket expenses on unwary consumers.”
“Consumers need to be aware that under some health insurance policies they may not be covered for basic things that are crucial to their health due to exclusions and restrictions.”
Current data supplied by the private health insurance regulator, PHIAC, shows that 23% of all policies sold by Medibank, Bupa and Nib have reduced cover with some benefits excluded and an excess. In contrast, for hirmaa funds that figure is a low 1%.
“hirmaa funds exist only to support the needs of their customers, so the level of cover they provide tends to be not only more affordable than the big for-profits but also much more comprehensive.”
This is backed up by industry data showing that 80% of policies sold by hirmaa health insurers have absolutely no exclusions or restrictions what-so-ever, whereas for Medibank, Bupa and Nib combined, that figure plummets to less than 50%.
“Consumers need to know that when it comes to private health insurance, the level of cover supplied and its cost can vary greatly depending on which health fund they are with.”
Changing health insurers is easy and an excellent place to get more information is at the Australian Government’s website www.privatehealth.gov.au.
“It really does pay to shop around and consumers need be wary about what is and what is not covered under their health insurance policy.”
From 1 April 2015 Medibank Private will raise its average premium by 6.59%. Weighted for size across the industry, private health insurers will on average raise their premiums by 6.18%. Weighted for size, hirmaa funds have raised their premiums by less than the industry average for each of the last 5 years with the weighted average increase for 2015 being 6.11%
hirmaa is the peak industry body for seventeen private health insurers which are member-owned and not-for-profit. In all, the hirmaa funds provide private health insurance for over one million Australians.
A complete list of hirmaa funds is available at https://membershealth.com.au/our-funds/. Premium rises come into effect on the 1st of April 2015.