At what point does private health insurance simply become too expensive? Like any insurance – car, house, life, for example – you pay for coverage in the unlikely event you may one day need to make a claim.
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The same goes for private health insurance. You pay a premium weekly, fortnightly or monthly in the event you may need to go to hospital or need to visit a dentist.
And let’s face it, no one really wants to be in hospital if they can avoid it. The same applies for visiting a dentist.
But the fact is, private health insurance is becoming so expensive for many people, simply saving the money they would normally pay out in premiums and paying the full cost for a medical procedure is becoming a viable option.
It’s fairly common for people who need glasses to require a new pair every two years or so. For many people who need multi-focal lenses, that cost could easily run upwards of $600 or more. If you have full extras cover, the most you will receive back in most cases would be in the vicinity of $200 to $240 – leaving you out of pocket up to $400. In those instances, it’s easy to wonder why we bother with private health insurance.
But there-in lies the problem. It’s a fear of the unknown that all-but forces us to take out coverage. That and the taxation rules around private health insurance forced upon us by the federal government.
It’s a fear that we may one day wind up in hospital needing a heart operation, a shoulder reconstruction or our tonsils removed. When that day finally does arrive, then we would be truly thankful for our private health insurance.
On Monday, the nation’s private health insurers applied to the federal government to increase their premiums by another 5 per cent in April, increasing the cost for the average family an extra $200 a year.
That may not sound a lot, but the rate of health insurance inflation is outstripping wages growth by three-fold.
Throw in the fact that a new report into health funds shows that insurance payouts for cover such as dental, chiro, physio and optical have dropped by about 6 per cent, despite policyholders paying 18 per cent more for cover.
Unless the federal government can do something to reign in the cost of medical inflation, or find ways for insurance companies to reduce their costs, then the exodus of Australian away from private health insurance will continue in even greater numbers.
