Australia:Affordability is main reason young people lack private health insurance

The main reason people aged 20-35 in Australia do not take out private health insurance is the inability to afford it, as 53% of respondents indicated in a survey commissioned by the Private Health Insurance Intermediaries Association (PHIIA).

Yet the survey results also show that 57% of the respondents have their own private health insurance policy while 43% do not.

The survey report, titled “Are Young People Getting a Fair Go From Private Health Insurance?”, says that a further 15% of Australians believe that the public healthcare system meets their needs adequately, while one in 10 plans to purchase insurance after turning 30. Some respondents suggested lower premiums and tailored coverage and options to improve the affordability of private health insurance.

Other key findings

• The most common reason young people purchase private health insurance is to avoid taxes and loadings.

Just over a quarter (26%) of respondents indicated they took out private health insurance to avoid taxes and loadings associated with not having private coverage. Other reasons include coming off their parents’ policy (21%), wanting to bypass public waiting lists for elective surgery (15%), ensuring coverage for their children (13%) or planning to start a family (10%).

• Hospital and extras are the most common cover taken out by young people, although younger cohorts tend to choose hospital-only policies.

Overall, three-quarters of survey respondents purchased hospital and extras cover, with 18% choosing hospital only and 7% taking out a stand-alone policy for extras. Consumers aged under 25 were more likely to purchase hospital-only coverage, at 43% than those aged 25 to 35 – four in five of whom chose to take out hospital and extras cover.

• Accident injury is the primary cover needed from private health insurance hospital policies

Accidental injury cover is a priority for young people, with 74% of respondents nominating accident cover as a key inclusion in an ideal private health insurance policy. Dental surgery performed in a hospital setting follows closely, with 56% of respondents indicating they would include this in a policy they could tailor to their needs. Other notable priorities include back, neck, and spine coverage (51%), cancer treatments (43%), and pain management (42%).

• Along with strong demand for in-hospital dental surgery, dental is the key benefit of extras coverage for young people.

Given a choice of specific items for inclusion in an extras policy, the top priorities for individuals under 35 would be dental check-ups, cleanings, and related services, with 69% of respondents expressing interest. Ambulance cover follows closely at 65%, highlighting the importance of emergency medical transportation coverage. Other commonly selected items include optical coverage for glasses and contact lenses (47%), and physiotherapy (47%).

• The inclusion of GP visits, along with mental health care services, would be popular with young consumers

Over half of the respondents (53%) indicated that they would include GP visits in an extras policy if they could tailor their cover to include services they most likely want or need. A further 48% indicated they would have mental health care services, indicating strong demand by young people to care for their psychological and physical health.

The 2023 Young People and Private Health Insurance Survey was carried out by Survey Matters on behalf of PHIIA. It was conducted in June 2023 via an online survey between 6 and 12 June 2023. A sample of 302 consumers across Australia provided their feedback. The online survey was open to respondents between the ages of 20 and 35, with an even split of respondents with and without private health insurance.

Source: Asia Insurance Review