Retirement
Aussies fail to see value in health insurance
New research from Roy Morgan reveals that Australians’ attitudes towards the value of private health insurance are declining, with younger generations particularly concerned by the cost.
Aussies fail to see value in health insurance
New research from Roy Morgan reveals that Australians’ attitudes towards the value of private health insurance are declining, with younger generations particularly concerned by the cost.
According to the latest findings from Roy Morgan’s Single Source Survey, just over half of those with private health insurance (56.2 per cent) consider having coverage to be “essential”.
This is down from nearly two-thirds of fund members considering health insurance “essential” in 2014, and represents the biggest annual decline in sentiment over the last four years, at -10 per cent.
The data, which was collected from interviews with 50,000 Australians, including 8,000 health insurance members, revealed that dissatisfaction with Millennials and Gen X in particular is driven by the perceived high cost of cover.
This is reflected in the fact that the two age groups were significantly above other generations in agreeing to statements such as, “I want the cheapest cover and don’t care about the provider”, “The only reason to have health insurance is to avoid paying extra tax” and “I don’t see much value in having it”.
As an example of this trend, Roy Morgan highlighted that 22.5 per cent of Millennials and 20.1 per cent of Gen X indicated they believed “the only reason to have health insurance is to avoid paying extra tax”; in comparison, only 2.6 per cent of pre-Boomers agreed with this statement.
Across the age groups, a lack of understanding of what private health insurance covers was another key driver of falling satisfaction levels. Overall, 43.7 per cent of members agreed that “it is difficult to understand what you are actually covered for”, a 7.7 per cent spike on the previous year.
“It appears that the major decline in considering it essential to have private health insurance is likely to be a response to the lack of perceived value due to rapidly rising premiums and some uncertainty relating to what is covered,” said Norman Morris, industry communications director at Roy Morgan.
“This research has only covered the attitudes of private health fund members and so it’s likely that people without this insurance are even more adversely predisposed towards health insurance. This makes it a challenge to attract new members as well as retain existing ones.”
The findings were released alongside other Roy Morgan data, which found that in the next 12 months, 1.31 Australians without private health insurance intend to take out coverage.
This is the lowest number of intended health insurance members in five years, and reflects a 17.1 per cent drop in those intending to take out such coverage since 2017.
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