ABC Radio Adelaide program interview with Dr Rachel David rebutting claims by CHOICE about the value of PHI to younger Australians

Station: ABC Radio Adelaide
Program: Late Afternoons
Date: 29/06/2021
Time: 3:30 PM
Compere: Sonya Feldhoff and Jules Schiller
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


SONYA FELDHOFF: Dr Rachel David is CEO of Private Healthcare Australia. Dr Rachel David, does the argument for getting private health insurance at the age of 30 stack up given the penalties after that age?
RACHEL DAVID: Well look, I’ve listened to what Choice has had to say and read their communications in the media about this, and I have to say, I’m a little bit worried about it. I’m worried about the nature of their communication, and because it really misses the point, and it was the point that you made about what insurance actually is. Insurance is a way of managing the risk of things that could happen that are high cost, but that are very difficult to predict. And one thing that we are seeing growing at a far greater rate than expected in younger people is the risk of admission to hospital for a serious mental health condition. This has grown at 3.5 per cent per year, and it’s now the highest- it’s now the main reason that young people claim on their health insurance. It’s exceeded reproductive health about five or six years ago. It’s- but because of the nature of a number of mental illnesses, it’s actually really difficult to assess your own risk. So what we’re suggesting is that anybody who has a family history of a mental health condition or substance dependence, alcohol or drug dependence, or has had that history themselves, seek medical advice or talk to your GP, before you can make a decision about private health insurance. These are conditions that only the most serious end of the spectrum is admitted to a public hospital. Most of the admissions to hospital for mental health conditions and addictions occur in private so it could be very difficult, in fact, to access care for a number of these conditions in the public system, if, in fact that’s what you need.
SONYA FELDHOFF: I’ve got a text here, it says, what about dental, physio optical, et cetera? I’ve found health insurance invaluable in my 30s. And this texter asks, this is Peter Christie(*), he says don’t we also pay more on a Medicare level if we don’t have private health insurance? My understanding is that if you earn over a certain benchmark wage, is that right Dr Rachel David?
RACHEL DAVID: Yes, it is. So you will pay a higher Medicare levy at different levels if you’re on a higher income. And that is regardless of your age. It kicks in for singles at about $90,000 per year. So that’s another thing that you need to take into account if you’re crunching these numbers. The issue for the dental is interesting as well, in that you could create a separate savings account for yourself and save up enough money to meet your dental needs. But again, it’s quite hard to predict. And if you do it through a health fund, a health fund will remind you each time you need a dental check-up. You usually get that without a co-payment.
SONYA FELDHOFF: Dr David, can you explain what is the difference between – with lifetime health cover – what is the difference between entering private health- can you give us some numbers on entering at 30, as opposed to entering at 40 say?
RACHEL DAVID: Well look, it does depend on your- on the sort of policy that you have. So you could have a basic level of policy, and because it’s a percentage that it goes up by each year, if you had a basic level of cover, and you actually got the rebate, which is a government subsidy for people on lower incomes, it would seem to go up a lesser amount, but it’s roughly 2 per cent per year for each year that you delay taking it out. And it’s because age is a risk for a number of serious- of significant health conditions. But that doesn’t mean that if you’re young, something nasty can’t happen. And we’ve seen people, we’ve seen a number of claims last year, which went into the hundreds of thousands of dollars for people with common mental health conditions like depression, anxiety and eating disorders.
SONYA FELDHOFF: So are we talking about hundreds, or are we talking about that thousands of dollars’ difference in a premium between a 40-year-old who’s had lifetime health cover since 30 and one who only starts at 40?
RACHEL DAVID: Depends on the type of cover that you’ve got. So if you’ve got top hospital cover, it could be in the thousands.
SONYA FELDHOFF: Really, that much difference?
RACHEL DAVID: Yeah. So look it depends I mean, top hospital cover, which covers for everything, and the reason that someone might want to take that out when they are 40, or they need- is to get access to reproductive health services, so that’s obstetrics and IVF. Or because they’ve started to get conditions like the need for joint replacements, or if they have a heart or a cardiac or heart issue. So again, those things you would need a high level of health cover, silver or gold level.
SONYA FELDHOFF: Dr Rachel David, so when we talk about lifetime health cover, what would- I mean, obviously we’ve heard what Choice had to say on this, but what do you say are the things that people need to consider about joining up?
RACHEL DAVID: Well look, I think you’ve got to consider that you know, for hospital cover you need- what you’re doing is you’re managing the risk of something that might be unlikely, but that you might- it will either cost you a lot, or you might not be able to get access in the public health system. And I think things like rehabilitation from serious accidents and mental health falls into that category. Also, if you’re working and you need quick access to surgery, if you can’t afford to be on a waiting list. Some of the waiting lists we know are, you know, for painful conditions, may exceed 12 months and if you need to get back to work, that is not going to be a good solution for you. So I would strongly consider making the investment in private health insurance if you are concerned about those issues. For extras cover, if you’re very disciplined about savings, and you know that you’re disciplined about keeping your appointments, and you’re disciplined about saving, by all means, open your own bank account and put some money away. But if you’re like most of us, and you want the security of having that dental cover and the need for the occasional physio appointment there, then there are some very affordable options with private health insurance as well.
SONYA FELDHOFF: Dr Rachel David, thank you.
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