What are younger Aussies looking for in a health insurance product?

What are younger Aussies looking for in a health insurance product? | Insurance Business Australia

What are younger Aussies looking for in a health insurance product?

An increased number of Australians aged under 30 are willing to take out health insurance, but the products available are not appropriately designed for them, according to personal finance marketplace and advice company Compare Club.

The company's latest study showed that younger Australians are 155% more likely to request psychology extras in their policies, but the cost of mental health is often only available in more expensive policies that provide features this age group cannot access. Aside from mental health, general dental treatments and physio were the most requested items on younger Australians' extras.

It also found that:

  • 22% of Australians under 30 that participated in the study want pregnancy cover. However, this cover is only available in the Gold or Silver Plus tier at a higher cost;
  • 45% said they expect health funds to help support their health, particularly mental health. However, these benefits are usually found in expensive top-tier coverage;
  • Many respondents confuse the Medicare Levy Surcharge with Lifetime Health Cover loading and do not understand how they work. As a result, those with lower income take out limited basic hospital coverage despite not needing it;
  • The respondents want communication from funds and the government to be clearer around changes to family policies, highlighting Compare Club's findings that many families and younger Australians are unaware that some funds will allow adult children to stay on family policies up to age 31; and
  • The respondents are more likely to seek advice from friends, colleagues, or parents for advice on health insurance than any other age group.

Read more: Members Health sees surge in young people taking out private health insurance

The results of Compare Club's report aligned with the Australian Prudential Regulation Authority's (APRA) latest private health insurance (PHI) data that young Australians have become interested in taking out PHI.

Over the 12 months to March 2022, the number of people covered by a Members Health Fund Alliance (Members Health) hospital policy increased by 3.47%, more than thrice the pace of the rest of the industry, with a majority (more than 100,000) of these new members under 45 years old.

In a previous statement, Members Fund CEO Matthew Koce said: “As states manage the huge demand on their public hospitals, more and more Australians are turning to Members Health funds for the peace of mind they offer.”