This private health cover is worse than no cover at all

Private health insurers have been slammed for selling “junk policies” that are a rip-off, particularly for over-60s buyers.

In its annual Private Health Insurance Report Card, released Monday, the AMA said low-cost, basic-cover policies should be banned from the health insurance market.

“There are a lot of policies on the market that do not provide the cover patients expect when they need it,” Michael Gannon, AMA’s president, said.  

“If people have one of these ‘junk policies’, the AMA encourages them to check their policy matches their current and anticipated health care needs. And, if not, dump it for better cover.”

Basic cover policies – ones that cover only a handful of health issues or only public hospital admission —  are enticing to many people who want to cut the cost of their private health insurance, but still retain some kind of cover.

However, iSelect Corporate Affairs Manager Laura Crowden said many people didn’t realise just how little they could claim under the policies.

Read more: Private health vs Medicare: What you need to know

She said over-60s in particular should be wary about forking out for one of these policies.

“For some people these kind of budget policies are appropriate, but for the majority of people and certainly over-60s, we would strongly caution them against any of those kind of policies,” Crowden told Starts at 60.

“The real concern with these junk policies is people not realising how little they are covered for. So they’re taking them out and they’re assuming because they’ve got private health insurance they’re covered for all these different things and then when it comes to crunch time and they’re in need of these services, they find out they’re simply not covered.”

Read more: Greens announce dramatic plan to overhaul Medicare

Crowden said there were better ways for over-60s to save money on their health cover without skimping on key coverage areas.

“We know a lot of older Australians are very conscious about their value and their budget and they’re really trying to cut costs on things like private health insurance,” she said.

“[But] if they are wanting to cut back costs, we’d ask them to look at other ways to do that, whether it be increasing their excess or thinking about only having hospital cover or only having extras, looking at other ways to reduce the price rather than simply taking out the cheapest possible policy they can find.”

Do you have private health insurance? Or do you stick to Medicare? Do you think private health cover is too expensive?