Health Insurance Premium Increases Hit Older Australians Hardest
Melbourne University's Household, Income and Labour Dynamics in Australia project surveyed about 17,000 people about their lives each year and confirmed what our member have been telling us for years: massive premium increases are hitting older people hardest of all.
Australian households are spending about 20 per cent more on health insurance than they were in the mid-naughties and the cost has increased most for older couples.
The growth in premium prices is even larger but the economist leading the 13-year study believes households are switching to cheaper policies with less coverage as the price hikes dwarf income growth.
It has found 61 per cent of households had health insurance in 2014, up from 54 per cent in 2005, likely influenced by government policy that has encouraged Australians to get insured.
Factoring in inflation, households were spending $2237 annually on health insurance in 2014, up from $1869 in 2006, an increase of about 20 per cent, or $368.
Elderly couples were most likely to be insured (71 per cent) and they were also the group who experienced the steepest increase in health insurance costs, rising 31 per cent in eight years. The mean household spend on health insurance for elderly couples increased by $640 between 2006 and 2014, or $80 each year.
The report's author Roger Wilkins said "We know that elderly people tend to go for the higher levels of cover and perhaps the cost of those types of policies have risen more than the basic levels of cover. The increase for other households might have been even greater if they were staying in the same policies."
He's referring to government data, which shows an increase in the price of premiums from 2009 to 2014 of 15.5 per cent, compared to the HILDA respondents saying that they were actually paying about 11.6 per cent more.
Consumers Health Forum chief executive Leanne Wells said the study confirmed "the steady rise in above inflation health insurance for the past decade", highlighting a need for reform.
She said "Many households have been forced to shrink their cover because of rising premiums which has led to the growth in junk policies leaving people with cover that is not really worth the still-considerable expense."
Dr Rachel David, CEO of Private Healthcare Australia, which represents most of the health insurance industry, said insurers were searching for ways to reduce cost but while inputs like the price of medical devices continue to escalate, so too would premiums.
