Last month, the price of private health insurance rose, as it does every year, to keep up with the rate of inflation.
As of 1 April, the price of policies increased by an average amount of 6.18 per cent, matching rising cost pressures placed on Australia's health insurers. Health funds have seen the cost of providing benefits increasing, as a result of the added care requirements of an ageing population, the growing effect of chronic diseases, higher utilisation rates and the advance of new medical technologies.
Along with this comes recent news from the Private Health Insurance Ombudsman (PHIO) that Australians are finding a voice for their health insurance concerns. The 2014 State of the Health Funds Report, released last month, showed record amounts of communication by health fund members in regards to their policies.
And yet the two events have not been in direct correlation, the PHIO explained. In other words, the department received 72 complaints about premium increases in the first quarter of 2015, according to its recent quarterly bulletin.
By comparison, they only received 56 complaints last year, although the ombudsman is keen to point out that it is "clearly not the cause of the 23 per cent increase in overall complaints comparing this quarter to 2014".
Communication and support praised
In fact, the PHIO praised the health insurance industry for improving its collective clarity around premium increases, with policyholders finding themselves generally well-informed on how much their rates were rising.
"Complaints about premium increases have remained low in recent years for a number of reasons," this quarter's report read.
"These include: better communication to members about rate increases; an annual rate increase at a pre-determined time and government measures that support private health insurance, including the private health insurance rebate; lifetime health cover penalty loading; and Medicare levy surcharge."
Cost still an issue
However, that's not to ignore the voices of those who have recently taken issue with the cost of their health insurance. After all, a 6.18 per cent average premium increase is significant to many households, and the actual amount charged to an individual policyholder has been anywhere between 3.98 and 6.99 per cent higher.
With 981 complaints lodged to the PHIO in the first quarter, cost was one of the most commonly touched-upon topics.
In this respect, it's important to remember that there are ways to reduce the cost of health insurance, including comparing health funds across Australia to ensure you are getting the right policy for a competitive price.
Many will have aimed to do this before the 1 April deadline, although practically any policyholder can find ways to save, even if they missed this cut-off date.
What were the other complaints?
Overall, premium rises were the third most common concern lodged to the PHIO in this previous quarter. The other complaints to make the top five were as follows:
1) Oral advice
The industry has been wrestling with the idea of how to accurately and accountably give quick and simple answers over the phone to policyholders' basic questions.
There were 129 complaints around oral advice in Q1 2015, and 410 in the year 2014 – a rise of almost 40 per cent on the year previously.
2) Membership cancellation
With premiums increasing, some policyholders decided to cancel their policies altogether. However, 84 complaints were received from consumers annoyed that their cancellation requests were not actioned within a suitable timeframe.
3) Hospital policy exclusions and restrictions
Seventy complaints arose from issues around customers requiring medical treatment though finding that changes to their health insurance policies meant they were no longer covered – another reason to ensure a policy relies on quality as much as cost.
4) Pre-existing condition waiting period
Sixty-four complaints were made around the waiting period for those with pre-existing medical conditions prior to their insurance benefits becoming active. To learn more, read our recent blog post on the matter.
If you feel like you need assistance in finding a health insurance policy that suits you, your family or your business, give HICA a call on 1300 44 22 01 for free and impartial advice.