Scores of people in Australia are now forsaking their private health insurance policies. An article suggests that the decline may be due to increased premiums which has been overtaking inflation and wage. The private health insurance industry may have come to a sudden halt.
The decline in insurance policy abandonment has been observed among a very specific demographic, those between 25 and 29 years of age. More that 64,000 people opted out of paying their health insurance premiums last year. Experts are citing the rising cost of living, which is not equivalent to wages and their pace of increase as the issue for deserting this industry.
Health economist Professor Stephen Duckett, looks at all sides of this issue. He understands this as a problem that shoots out of the government and of the industry both. Premiums are increasing in line with policies but the insurance companies can reduce cost for the policy owners. Services such as artificial limbs and private rooms in public hospitals can be provided at lesser cost.
The government has introduced various initiatives that would induce people to opt for private insurance policies. Of the $9 billion in public subsidies, Professor Duckett said about $6 billion went to the private health insurance rebate to encourage people to take out cover. “We’ve got to be getting the health insurance industry, the private hospital insurance industry to look at what can be done to reduce costs to make the system more efficient,” he argued.