According to a report released by consumer advocate Choice, the rising cost of healthcare is the second biggest cause of economic worry for Australians.
Its quarterly national cost-of-living survey found health cost concerns have jumped by 10 per cent. This means 73 per cent of respondents reporting were either “quite concerned” or “very concerned” by increasing medical expenses.
Choice chief executive Alan Kirkland told the Sydney Morning Herald the shift was likely due to an “almost 50 per cent cumulative price increase on private health insurance premiums since 2009”.
He said it was “little wonder Australians [were] anxious about the costs of cover for their families”.
“This underlines the importance of health insurance reforms, delivering greater value and transparency, as a priority in the new parliament,” Mr Kirkland explained.
Worries linked to political announcements
Choice’s report revealed “worries about essential health costs peaked with political announcements” over the past year.
“More than two-thirds of people were worried about GP costs (65%) and medicine costs (68%). This was after the May 2014 federal budget,” the report read.
“Concern reduced from September 2014 after it became clear that changes, such as a GP co-payment, would not be introduced.”
But, the Federal Government has approved an average increase of 5.59 per cent to health insurance premiums in April. This was another trigger for concern.
Private health membership falling
Australian Financial Review columnist Michael Smith recently wrote about the fallout from the rising cost of health insurance premiums. He discovered it’s not only consumers feeling the pinch.
“Hundreds of thousands of households are now opting out or downgrading their private health insurance plans. This is because they cannot see any value for the hundreds of dollars they shell out a month,” he wrote.
“This trend has alarmed the private health industry which, contrary to public perception, does not always benefit if premiums become so high that they start losing customers.
“Australian Prudential Regulation Authority data looked at the percentage of Australians with private health membership. It fell from 47.4 per cent to 47 per cent in the June quarter.”
“The health insurance industry believes the downwards trend has continued in the September quarter.”
According to Mr Smith some major insurers are even working on strategies to try to win back customers.
Young families and renters struggling
According to Choice’s survey families with school-age kids “are feeling it more than most” when it comes to increased living costs.
“Nine out of ten say their bills had increased in the last 12 months as compared to 85 per cent nationally,” the report said.
“Three-quarters of parents with children under five are worried about childcare fees. It is also shown that families with young children are getting hit the hardest by the impact of rising bills.”
The report also found renters and young Australians are “bearing a disproportionate share of the national financial worry”.
“In June 2015, three out of four renters and two out of three people with a mortgage said they are concerned about the cost of housing.”