Consumer advocacy group Choice calls out private insurance providers in Australia
Three of Australia’s largest private health insurance companies have been named by Choice, a consumer advocacy group, for offering what it calls “junk” policies. According to Choice, these policies are expensive, but provide relatively little benefits when compared to what can be obtained through Australia’s Medicare system. Policies obtained through this system are less expensive and may be a better option for consumers that need insurance coverage.
Junk policies provide less than 1% coverage for several medical services
Among those identified by Choice are Medibank, HCF, and NIB. Tom Godfrey, spokesman for Choice, suggests that the organizations analysis of the junk policies offered by these companies covers less than 1% of the medical services available in Australian hospitals. These policies also do not provide coverage for serious illnesses that are relatively common, such as cancer and heart disease. Choice has issued concerned over the popularity of these junk policies, suggesting that consumers could be exposed to significant risks due to inadequate health insurance coverage.
Health insurance premiums are set to rise
With insurance premiums set to rise by an average of 5.59% in the coming days, the issue of junk policies is becoming a concerning problem. In general, these policies will become more expensive, but their benefits will not increase in any noticeable fashion. Moreover, Choice notes that these junk policies were marketed to consumers in such a way that many believed that they would have greater coverage, but this is not the case. Choice has now called upon the Australian government to reconsider the eligibility of these insurance policies, limiting their availability to consumers.
NIB notes that basic insurance policies are ideal for those needing to save money on coverage
Of the insurers named by Choice, NIB notes that it has been transparent in the way it has marketed its policies to consumers. The company has offered consumers clear information concerning what the policies cover and suggests that these policies are a good option for consumers that need affordable coverage. NIB claims that those taking out very basic health insurance policies tend to purchase greater levels of coverage when needed in the future.