According to new research from Roy Morgan, in the year to March 2018, around 256,000 Australians chose not to renew their private health insurance.
This represents an increase from the same period in 2017, when the figure was 182,000, and is the highest number in the last five years.
Roy Morgan’s Single Source survey involved more than 50,000 consumers per annum, including over 20,000 private health insurance members.
The main reason consumers cited for not renewing their health insurance was that it is ‘too expensive’. This increased to 53.3 per cent in the last year, compared with 47.1 per cent in the previous year. Another key concern was found to be ‘too much out of pocket expense’, which increased from 12.8 per cent to 19.1 per cent.
Nearly one in six members who didn’t renew said that ‘Medicare suits my needs’. Roy Morgan said that it appears that there are an increasing number of people seeing no real value in having private health insurance, given its cost and perceived benefits over relying on Medicare.
“This research has shown that apart from the cost of health insurance being a major problem for customer retention, it should be related to the perceived benefits or value of paying increasingly high premiums,” said Norman Morris, Industry Communications Director at Roy Morgan. “With a large proportion of individuals who leave saying that there remains a major gap for them to pay (i.e. ‘too much out of pocket expense’) and ‘Medibank suits my needs’, there is major doubt among many members regarding the current value to them of retaining their private health insurance. It is up to the health funds to communicate the value of having private health insurance over just relying on Medicare.”