Health rebate coaxed Australians into funds

Since March 2000 over 2.5 million Australians have been lured into joining private health funds. Membership figures show over 45 per cent of the population have private health insurance.

While the government initiatives to encourage Australians into private health funds were successful in increasing membership, a recent survey conducted by TQA Research has found that 16 per cent of fund members would cancel their health insurance if the 30 per cent rebate scheme was abandoned. So while for many people the lure of premium rebates coupled with the burden of higher premiums for first time members aged over 30 were successful in getting them to join a health fund, the benefits of private health insurance are not enough for some to maintain their membership if government initiatives were dropped.

Membership decreased slightly from 45.8 per cent in September 2000 to 45.4 per cent in December last year. This was the first reduction in private health fund membership since 1998. Although the December decrease was only slight, it does indicate some dissatisfaction with the private health insurance industry. With almost half of Australia’s population currently possessing health insurance, a bigger responsibility now lies with the private health funds to satisfy the needs of this substantial customer base. Recently a few initiatives have emerged from a few of the larger health funds endeavouring to attract and maintain customers. The initiatives largely rely on customers taking out ancillary cover to receive bonus benefits.