Yahoo Finance Health insurance shake-up to save 1.47 million 'blissfully unaware' Aussies money: 'Game-changing'
OPINION: As out-of-pocket expenses for health care rise, the insurance industry needs to make sure Aussies aren't paying for cover they don't need.
Health insurance is supposed to be our safety net, but it often feels like a frustrating web of confusion, bureaucracy, and wasted potential. There are 14.7 million Australians with private health insurance cover.
Many will be blissfully unaware of how much of their health insurance money is left unspent in their annual health plans and don’t use what they are entitled to.
This lack of awareness and monitoring around health insurance means that many benefits go unused, and the unclaimed funds remain with the insurance companies.
It's a lot of lost money pocketed by insurance companies.
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What consumers may not realise is that they are contributing to a system where their funds are not maximised for their benefit but instead, bolster the financial gains of insurers.
By grouping a range of extras that may not be used or needed, insurance companies create this facade of extensive coverage while driving up costs and falsifying the actual value of the policy.
There are so many options that don’t match people’s specific needs. Imagine paying for a policy that doesn’t cater to your actual health issues or lifestyle?
'Major gripe': Aussies ripped as out-of-pocket expenses soar
A major gripe with health insurance is the range of extras offered are often irrelevant to a person’s needs.
The one-size-fits-all approach makes it harder for consumers to track what they actually need versus what they’re paying for.
The gaps between what’s covered and out-of-pocket expenses can also result in unexpected costs, further obscuring the actual value of a policy.
It undermines the perceived value of the policy and the disconnect results in a substantial financial rort, where people are spending money on health insurance that offers limited value to them.
Health insurance desperately needs a shake-up.
We're stuck with a system that values the quantity of services over quality, leaving countless people with useless coverage that often doesn’t address real needs.
How can I get better value out of private health insurance?
The alternative is a data-driven approach that addresses the underlying causes of a person’s health issues by taking into account their health status, lifestyle and personal goals, ultimately leading to better outcomes.
For instance, if data shows that someone frequently uses physiotherapy or speech therapy, the plan automatically adjusts to offer more of these services.
Data-driven personalised insurance isn’t about ticking boxes or post codes, it’s about making insurance work for the policy holder.
This is where value-based health insurance is a game-changer.
Personalised health insurance represents the future by leveraging data and technology not to track how much people spend or don't spend, but to assess how effectively a person is progressing and achieving their health goals.
By focusing on the quality of care rather than the volume of services, a data-driven model personalises health and tailors it to individual needs to achieve better outcomes.
If insurers were genuine about delivering quality health plans, they would be more diligent about gathering detailed information about a person's medical history, current health conditions, lifestyle factors and personal preferences and curating a customised plan.
It would also put a stop to policyholders paying for coverage that they never use and don’t need.
