Health

Private health insurance ‘a rip-off’ for most young people, consumer advocacy group says

A consumer advocacy group has advised young Australians not to feel pressured into buying private health insurance they do not need.

CHOICE Health Insurance Expert Jodi Bird said industry campaigns about turning 30 and Lifetime Health Cover (LHC) were “overblown”.

Private health insurance 'a rip-off' for most young people, consumer advocacy group says

“Private health is a rip-off for most young Australians,” Ms Bird said.

A consumer advocate group has advised Australians under 30 to not feel pressured into buying private health insurance they do not need.

“Years of scare campaigns and flashy marketing have had an impact on people’s perceptions of health insurance value and the tax implications.”

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Ms Bird said for under-30s, this could be up to $1150 a year “wisely spent elsewhere”.

“For over 30s, we’ve crunched almost 85,000 scenarios and found 99.8 per cent of the time you’re better off getting health insurance when you’re ready,” she said.
Ms Bird said incentives from the government and private health insurance industry were often used to “entice young people into health insurance, especially during tax time”.

CHOICE research has revealed these still don’t offer good value for money for most young people.

“The Lifetime Health Cover (LHC) loading is the health insurance marketer’s best friend,” Ms Bird said.

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“Our advice is to simply save the cost of the cheapest cover every year until you actually need cover.”

Ms Bird said in 99.8 per cent of scenarios, the savings in premiums plus the interest earned on it will “more than cover the extra cost of the LHC loading”.

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