New data has highlighted “a concerning new trend” of older Australians aged 75 to 84 taking out private health insurance (PHI) and hospital cover for the first time amid growing wait times for cataract surgery and other elective surgeries.
The surge in interest in private health insurance among older Australians is being attributed to long elective surgery waiting times in the public system, which remains high post-COVID, stated Compare Club, the country’s leading health insurance comparison website.
Currently, the median waiting time for a hip replacement in the public system is reportedly 293 days while cataract surgery is 158 days.
The latest PHI policyholder statistics, published in the Australian Prudential Regulation Authority (APRA) quarterly report and corroborated by data from the Private Health Insurance Intermediaries Association (PHIIA), show a year-on-year rise in hospital cover purchases among the aged 75 to 84 age bracket, Compare Club reported.
According to the organisation, private healthcare can be expensive for people aged 70 or more who are taking it out for the first time especially if they don’t purchase a policy that provides adequate cover for their needs.
“Not only do older people have more complex health problems, which require more expensive coverage, but they will also pay 70% of the lifetime health cover loading fee (LHCL). The LHCL is applied to all Australians by 2% each year that they don’t take out private health insurance from the age of 31,” a statement said.
Ms Kate Browne, head of research from Compare Club, urged older Australians to cautiously consider their PHI options.
“If you are in this age bracket and you are looking to take out private health insurance for the first time, it’s critical to find a hospital cover that includes the procedures you are likely to need as you age. Basic, Bronze, and many Silver policies simply don’t cover these which means you are being hit with unexpected out-of-pocket expenses,” she said.
“Good private health insurance taken out when you are over 65 is not going to be cheap, but unless you are careful, you could end up paying for an expensive policy that still doesn’t cover you for what you need. If you are going to pay, make sure it counts so you get the best cover and can avoid those public hospital waiting lists.”
For younger Australians, Browne urged them to consider taking out PHI before they turn 31 to avoid incurring the LHCL.
“By securing a policy in your 30s, you not only avoid costly lifetime health cover loading fees but also ensure you’re prepared for potential health challenges down the road,” she said.
Browne said there’s a need for more transparency in some health insurance options, with many insurers prominently displaying the lowest policy rates, but only revealing the actual costs, including LHC loading, during the final stages of the purchasing process.
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