Home Wealth Insurance Here’s why consumers are questioning health insurance

Here’s why consumers are questioning health insurance

New research detects shifting sentiment among private health fund members.

Senior Digital Journalist, Your Money

(iStock.com/LUHUANFENG)

Australians are losing faith in the value of having private health insurance with less people believing it to be necessary.

A study by Roy Morgan Research indicates attitudes by private health insurance fund members are worsening, with those considering it “essential” having fallen by nine percentage points to 57 per cent in the four years since the last report.

Overall negative attitudes have risen during that time. Over 44 per cent of members say they find it difficult to understand what their health insurance covers them for, an eight per cent jump since 2014.

More than 16 per cent said they didn’t see much value in having health insurance, an increase of five per cent, while two per cent more (to 15 per cent) say they only have it to avoid paying extra tax.

Meanwhile, positive attitudes were found to be declining, and less people said they believe it would cover medical expenses in times of need or that it gave them peace of mind.

With the research just looking at the attitudes of fund members, Roy Morgan spokesperson Norman Morris said attitudes by non-members are presumed worse.

“This makes it a challenge to attract new members as well as retaining existing ones,”  Morris said.

Morris said the downward trend should be of concern to both health funds and the government, as the pressure on the public health system increases.

New generations

The decline in attitude is largely generational, with 77 per cent of pre-boomers and 69 per cent of boomers believing private health insurance was “essential.”

That attitude plummets in younger generations, with just 38 per cent of Gen Z (born after 1991) and 46 per cent of millennials taking the same view.

The report found younger generations were far more likely to say they wanted the cheapest possible provider and didn’t care who the provider is.

“This analysis has shown that there is a need to understand what motivates different age groups and generations to take out and stay in health insurance as they cannot be treated as a single homogeneous group,” said Morris.

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