Number of Australians taking out private health insurance increases despite price rises

Despite the rising cost of private health insurance, Australians panicked by ever-rising public hospital wait times have made a surprise decision.

Swelling public hospital wait times has caused a sharp increase in the number of Australians taking out private health insurance premiums.

Despite the cost of most premiums rising by almost three per cent in October, which normally causes a drop in private insurance membership, the latest figures released by the Australian Prudential Regulation Authority (APRA), show almost 35,000 Australians bought new hospital cover policies in December.

Private Health Care Australia believes the increase is linked to Covid and concern over a blow out in public hospital waiting times, caused by the pandemic surgery ban as public hospitals struggle to work through the backlog.

More than 95,000 people are currently on the public elective surgery waiting list in New South Wales and Victoria’s backlog is expected to take up to two years to resolve.

PRIVATE WAITS ‘WEEKS AT MOST’

According to Bupa’s Managing Director of Health Insurance, Ms Emily Amos, the wait time for elective surgery in the private system is minimal by comparison.

“We are seeing private hospitals working hard to clear elective surgery backlogs with wait periods now at pre-COVID levels,” she said.

“Exact wait periods vary between states and hospitals and depend on availability of the doctor, but generally speaking a private patient will have immediate access to treatment or wait only a matter of weeks at most.”

APRA’s statistics also show that in the last three months of 2020, insurers paid benefits for 2.81 million days in hospital.

Ms Amos believes these numbers will increase as COVID vaccines roll out and consumer confidence increases.

However, with the cost of private health insurance set to rise by 2.74 per cent on April 1, which will cost the average family an extra $127 a year – the second increase in just six months – other experts are worried Aussies will quit their policies to cut back on bills, putting more pressure on the public system.

RELATED: Why do health insurers have waiting periods?

PUBLIC VERSUS PRIVATE

Private Healthcare Australia CEO, Dr Rachel David, believes health insurance is key to maintaining the balance between private and public health systems and getting people the treatment they need when they need it.

“Affordability is an issue right across the health system, but with estimated wait times in the public system likely to exceed 1.5 years for common elective procedures, the value of private health insurance has never been greater,” she said.

“The importance of our mixed private and public health system has been clearly demonstrated during the COVID-19 pandemic. It showed our capability to provide extra surge capacity while maintaining high quality and delivering a critical safety net for Australian governments as they navigated the response.”

Dr David also stressed that the price increase set for April is the smallest in 20 years and urged Australians concerned about it and ongoing affordability to contact their provider before cancelling.

“Health funds are committed to looking after their members, so if you are under financial stress as a result of COVID-19, contact your health fund to discuss your options,” she said.

RELATED: How to beat the private health insurance price increase

Originally published as Number of Australians taking out private health insurance increases despite price rises