Operation costs family $9,000 despite 30 years of insurance

The Federal Government has promised to reduce premiums for young people and improve the transparency of costs around private health insurance as part of reforms they are calling the biggest shakeup to the industry in decades.

However Australians are being warned of potential pitfalls involved in joining a fund as soaring premiums cause many to look for ways to save.

“Over the past 12 months the private health funds increased their profits by 17 percent” Nine Network finance editor Ross Greenwood said.

“They’ve also increased their premiums by twice the rate of inflation – the question is, who is winning out of all this, the consumer or the health funds?”

2 ways to save on Health Insurance:

One couple, Penny and Mike, told A Current Affair they thought they had done everything right during their 30 years in their health fund.

Despite paying nearly $800 a month, when Mike needed a back operation they needed to make up an astounding gap shortfall from their premium health care provider.

“We didn’t get much change out of $9000,” Mike said.

He said he wished now they had chosen to have the operation in the public system.

Australian Medical Association president Dr Michael Gannon said most private health contracts were littered with confusing medical jargon.

“All too often patients find out for the first time that their health insurance is not fit for purpose when they’re sick, when they’re scared,” he said.

“It’s simply not good enough.”

As well as the gap shortfall, another trap was the many cheap policies people join to avoid the Medicare levy surcharge.

The secret to maintaining proper cover is to update it every few years.

“The number of 55-year-olds who still have pregnancy cover or can still claim for IVF is staggering in this country,” Greenwood said.

Many modern websites such as iSelect and HealthInsuranceComparison.com.au* offer to help consumers find a competitive policy tailored to them.

Private Healthcare Australia CEO Dr Rachel David said the industry recognised the “complexities” which had developed over the years.

“Australian health funds have worked with the Federal Government and other stakeholders for the past two years to develop this package of reforms which is aimed at putting downward pressure on premiums, and making it easier for consumers to choose and use their health insurance,” she said.

“Keeping private health sustainable and premiums affordable ultimately benefits all Australians by keeping pressure off the public hospital system.”