Around 15 million Australians are paying for private health insurance, but a sizeable portion haven’t made a single claim in the past 12 months. With insurance costs rising and the cost of living continuing to pinch, many Aussies are considering ditching or downgrading their policy, but experts are warning people to think twice.
Petrus Buys took out health insurance for his family in November last year but hasn’t yet made a claim. The 29-year-old civil engineer told Yahoo Finance he had been putting off getting insurance, but the birth of his son Caleb kicked him into gear.
“We essentially came back home [from the hospital] and I realised now that I’ve got a kid, I’m not just caring for myself and my wife anymore,” he said.
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Buys, who moved to Australia two years ago from South Africa, ended up taking out a hospital and extras policy two days after his son was born in the public system.
He is paying $100 a month for the cover, or $1,200 a year. Despite not needing to make a claim yet, Buys thinks paying for health insurance is worth it for his family.
“$100 a month is not a lot considering that I’m sleeping a lot better knowing that I’m covered for all the critical things, especially dental, that are not covered by Medicare,” the Sunshine Coast dad said.
“It’s just that peace of mind, really, and for that money, I’m comfortable.”
New Finder research found two in five Australians with health insurance hadn’t made a claim in 12 months, despite paying hundreds or thousands of dollars in premiums, sparking fresh scrutiny over the cost and value of cover.
Finder health insurance expert Tim Bennett told Yahoo Finance that Aussies were facing a “tough juggling act” but warned people against ditching their health insurance cover altogether.
“No one wants to be caught out without cover when they really need it,” he said.
Finder found 38 per cent of policyholders hadn’t used either their hospital or extras cover in the past 12 months, while 32 per cent had only used extras like dental or physiotherapy. Only 17 per cent of the 1,013 people surveyed claimed on both hospital and extras in the past year.
Bennett said millions pay for insurance but never claim.
“Health cover is a valuable safety net for unexpected illness or injury, but for many it feels like dead money,” he said. “If you’re paying for it, use it. So many people forget they’re entitled to things like dental check-ups, physio visits or optical rebates — claiming just a few of these can make your policy far more worthwhile.”
It comes as high premiums combined with cost-of-living pressures are also forcing some Aussies to put their health on the back burner.
iSelect research found 33 per cent of Aussies were delaying routine check-ups like dental, hearing and cancer screenings, while 31 per cent were putting off GP visits.
With private health insurance rising by 3.73 per cent on average in April, one in three policyholders were also considering cancelling or downgrading their cover.
Buys said he was “feeling the pinch” from the rising cost of living, especially after having his child and with his wife now working less.
“We bought a house about a year ago, and we probably are spending about 40 per cent of our income on the mortgage,” he said.
Along with housing, Buys said the cost of groceries and household bills like electricity and water had also been rising.
“We are definitely cutting back a lot on leisure expenditures, so things like going on holiday, going to visit the family back in South Africa are happening less frequently,” he said.
“Myself being the main provider for the family, you’re getting forced into a corner where you need to start considering doing second jobs and side hustles and ways of generating additional income.”
Bennett said now was a good time to audit health insurance costs.
“Don’t waste another 12 months paying too much for a policy that doesn’t match your needs,” he said.
“Now’s the best time to shop around for health insurance relief as insurers fight for business ahead of the new financial year.”
Buys said he planned to compare his health insurance policy again once it comes up for renewal and was looking at claiming extras for a dental checkup and a visit to the optometrist.
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