As Costs Creep Up, Confusion Reigns Supreme
Sydney Morning Herald
Wednesday February 6, 2002
Consumers have every right to feel aggrieved at the latest push by Australia's health funds to lift premiums. Over recent years we have been cajoled through tax incentives and coerced with threats of having to pay more to join private health insurance. The justification? That higher membership levels would keep a lid on costs.
But the real problem is it is becoming increasingly difficult for fund members to work out just what they're paying for, and whether they are getting value for money.
There are now more than 40 health funds in Australia, each offering as many as five or six different products. On top of that, there can be different options within products, resulting in a market that is every bit as confused as anything the banks could dream up.
``It is difficult to work out what you're getting on a rational basis," said Matthew Blackmore, the executive director of the Consumers Health Forum. ``Each product has different levels of excess and co-payments which makes comparisons confusing."
Ironically, part of the confusion comes from the health funds trying to make their products more attractive. With premiums for full cover constantly rising, the funds launched a raft of cheaper products targeted at people who are young, healthy, or just wanting to avoid being caught by the Federal Government's Lifetime Health Cover scheme, which penalises those who join health funds beyond age 30.
The senior health policy officer with the Australian Consumers' Association, Nicola Ballenden, says many of the cheaper products have high excesses, exclusions and longer waiting periods. The danger, she says, is that consumers may opt for the low premium without realising the limitations.
Some funds now issue key feature statements to help make comparisons between products simpler. But when Ms Ballenden tried to do a price comparison recently, she said it was almost impossible to compare apples with apples. What hope is there for the rest of us?
© 2002 Sydney Morning Herald