Aussies have ‘systematic distrust’ of private health insurers, data says

As if the ongoing negative public commentary about the rising cost of private health insurance isn’t damning enough for insurers, new research has confirmed that the industry is distrusted by Australians.

According to research firm Roy Morgan, while healthcare professions consistently rank as the most respected professions in Australia – and have done since 1994 – the private health insurance industry “embedded in this trusted health ecosystem, is itself distrusted.”

In surveys Roy Morgan Research conduction between October 2017 and February 2018, the private health insurance industry scored a trust score of 1.3 per cent and a distrust score of 3.9 per cent, resulting in a net trust score of -2.6 per cent. This score means the industry is less trusted than the retail and travel industries, and sits between gambling, real estate and fast-moving consumer goods.

Michele Levine, Roy Morgan’s CEO noted that this level of “systemic distrust is unexpected given the highly trusted health system it operates in.”

“The private health insurance industry is inherently anchored on trust. It is a core component of the customer-insurer partnership,” she said. “The customer places their trust in the insurer; should they need to make a claim, they trust the insurer to fulfil its policy obligations.

“There is no doubt that when a patient has to pay an unexpected gap at a doctor’s surgery or hospital, they do not blame the health professionals, they blame their private health fund,” she said, adding, “this level of industry distrust should be of concern to the funds.”

Consumer watchdog Choice notes that private health insurance premiums have increased 70 per cent over the decade, forcing a growing number of consumers to question whether it’s worth keeping their private health cover altogether.

“Using the public health system through Medicare is a sensible option in many cases, especially emergencies,” CHOICE head of media Tom Godfrey said. “If you decide to go private, it pays to be aware of exactly what you’re getting in terms of cost, coverage and value for money.”

“Even if you’re struggling with the latest price hike, don’t be fooled into downgrading from a top-level cover policy into a ‘junk’ policy with excessive exclusions. Although it might reduce the premium cost in the short term, it can ultimately compound your hip-pocket pain.”

Meanwhile, Levine sent a stark warning to private health insurers about the importance of maintaining trust amongst their customers.

“Higher levels of trust feed a customer’s emotional belief that their fund will deliver on its policy promises, in turn reducing the customer’s price sensitivity. This is important to health insurance funds,” she said.

“In the current market in which private health insurance premiums continue to rise, it is a matter of survival that funds maintain high levels of net trust.”

What are your thoughts on private health insurance? Must have or unaffordable luxury?