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Private Health Insurance will change April 1 – but most Australians have no idea

Source: Roy Morgan Single Source (Australia): PHI Net Trust Score Survey, March 2019 n=1,036. Australians with PHI n=695, Australians without PHI n=335. Base: Australians 18+.
This Monday (April 1, 2019) the Government is introducing a new system of categorisation of hospital products, by creating consistent and easily understood tiers of cover, ranging from Basic, through Bronze and Silver, to Gold cover.

However, the majority of Australians (57.3%) are unaware of these reforms to private health insurance. And of those Australians who are aware of the changes, less than one-third (31.4%), believe they will be of any benefit.

These are some of the latest findings from Roy Morgan’s 2019 Private Health Insurance Survey, with a representative sample of 1,036 Australians 18+.

The survey reveals that fewer than half of Australians (42.7%) are currently aware of the April 1 introduction of the new health insurance product tiers, whether they have private health insurance or not.

Of Australians with private health insurance, just over half (53.8%) are aware of the changes, while Australians without private health insurance are largely unaware of the changes (80.6% unaware). 

Australian awareness of PHI changes analysed by PHI membership

Source: Roy Morgan Single Source (Australia): PHI Net Trust Score Survey, March 2019 n=1,036. Australians with PHI n=695, Australians without PHI n=335. Base: Australians 18+.

Among Australians who are aware of the upcoming changes, only 31.4% believe that the proposed changes will be of benefit to them. 29.3% do not think they will benefit them at all, and a further 39.3% are unsure if the changes will be of any benefit.

Beliefs about benefits of proposed PHI changes amongst Australians aware of the changes

Source: Roy Morgan Single Source (Australia): PHI Net Trust Score Survey, March 2019 n=1,036. Base: Australians 18+ aware of changes to PHI, n=448.

Older Australians are more aware of changes, but less convinced of their benefit

Australians over 50 years of age are more likely to be aware of the new system than their younger counterparts. Despite this, the younger Australians who are aware of the changes have a more positive outlook on their impact. However, these findings must be viewed in light of the fact that a smaller number of younger individuals have private health insurance.

Awareness of PHI changes by age

Source: Roy Morgan Single Source (Australia): PHI Net Trust Score Survey, March 2019 n=1,036. Aware of PHI changes n=448, unaware of PHI changes n=588. Base: Australians 18+.

Michele Levine, CEO Roy Morgan, says the changes to the Private Health Insurance (PHI) system being introduced are not widely known with a majority of 57.3% of Australians unaware the changes are about to be brought in:

“The Australian private health insurance (PHI) system is being substantially reformed in April with a new tiered system of different levels of coverage being introduced comprised of the Basic, Bronze, Silver and Gold tiers.

“However, the new tiered system is not widely known about with a majority of 57.3% of Australians unaware the new system is being introduced. Even amongst Australians with private health insurance only a slight majority of 53.8% are aware of the new system being introduced.

“Perhaps unsurprisingly awareness of the changes to PHI are heavily co-related to age with large majorities of younger Australians unaware of the changes being introduced. Over four-fifths of 18-24 year olds (84.1%) and over two-thirds of 25-34 year olds (70.5%) are unaware of the changes being introduced.

“In contrast a majority of Australians aged 50 years of age or older are aware of the changes being introduced to PHI. A majority of 55.8% of 50-64 year olds and a majority of 57.4% of 65+ year olds are aware of the changes being introduced.

“For those Australians who are aware of the changes being introduced the response to the changes is decidedly mixed. Just under a third think the changes will benefit them (31.4%) or won’t benefit them (29.3%) while just under two-fifths are unsure (39.3%).

“However a clear difference between the age groups emerges when one analyses these results by age. Although most young people aren’t aware of the changes for those who are aware the response is largely positive. A majority of 18-24 year olds (56.2%) and nearly half of 25-34 year olds (48.1%) think the changes will be of benefit – clearly higher than the small minorities of young people who don’t think the changes will benefit them which is below 20% for both younger age groups.

“In contrast, the most common response for older Australians aged 35-49 years old, 50-64 years old and 65+ years old who are aware of the changes is that they’re unsure whether they will be of benefit or not.

“Perhaps the greatest concern for private health insurers is that the changes being made to the system this April won’t arrest the decline in attitudes to private health insurance Roy Morgan has revealed in recent weeks. Over the last four years a declining proportion of Australian private health insurance members agree that private health insurance ‘gives me peace of mind’ 67.5% (down 6.1ppts since 2014) or is ‘essential to have’ 55.4% (down 9.6ppts).

“To gain the greatest benefit out of the changes to the PHI system the private health insurers need a deeper understanding of how Australians respond to their health concerns and what the drivers are for consumers who decide to take out private health insurance, and also what drives other Australians to choose not to take out private health insurance.

“Roy Morgan’s comprehensive Single Source data on PHI derived from over 50,000 annual interviews as well as the latest Roy Morgan Net Trust Score Report for Private Health Insurers are valuable resources to draw upon to gain a comprehensive understanding of the Australian PHI market and how best to attract new customers and drive growth.”

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