Health insurance extras wasted by two in three Aussies

Health insurance extras wasted by two in three Aussies | Insurance Business

Health insurance extras wasted by two in three Aussies
Costly health insurance extras, such as dental, optical, massage, and other complementary therapies, are often forgotten and left unused by as many as two in three Australians with health insurance policies, it has been reported.

A survey commissioned by Aussie comparison site finder.com.au has found that 68% of policyholders don’t keep tabs of how much money their health insurance policy were for claiming on extras, The Sydney Morning Herald reported.

According to the survey, almost three in four policyholders over the age of 55 couldn’t say what their extras allowance was; while 46% of policyholders aged 18 to 35 keep track of the extras they use.

Bessie Hassan, finder.com.au spokesperson said recent industry findings suggested that some 8.3 million Australians may not be getting the value of the money they spent on extras.

"That's a lot of money pocketed by insurers because Australians aren't keeping tabs on what they're entitled to," Hassan told SMH.

The survey revealed that in NSW, 65 per cent of people didn’t keep track of their extras at all. While 437 of NSW policyholders surveyed said they used their extras an average of 3.44 times since January, The Sydney Morning Herald reported.

The survey also found that Australian men were less likely to keep track of extras than women. Men also used fewer extras, with an average of fewer than three times since January, compared to an average of 3.55 times in women.

"At this rate, consumers are likely to barely come out in front," Hassan said.

The report cited an analysis by consumer group Choice which found that on average, just $370 was paid out in extras benefits to individuals in 2013-14. The group also found that consumers who opted out of their extras saved up to 45% in fees. The Choice analysis was published before the government’s 5.6% increase in health insurance premiums in July.

The analysis also suggested that Bupa and Medibank Private policyholders could save from 30% to 45% by dropping extras, though savings varied between states and territories, according to the report.

The SMH report said latest figures from the Australian Prudential Regulation Authority (APRA) showed that in FY15, private health fund members received less back from the record $22 billion in premiums they paid. APRA data also showed that while private health funds raised premium revenues by 6.4% and profit before tax by 8.9% in FY16, payouts to members rose only by 5.3%.

The Consumer Health Forum of Australia said the latest findings reflect the urgent need for the federal government to conduct its planned review of the industry as soon as possible, SMH reported.

Related stories:
Joint venture to expand the ‘TripAdvisor’ of healthcare
2016 FOS Australia National Conference to discuss mental illness cover