2GB Money News interview with Dr Rachel David re health insurance for young people

Station: 2GB
Program: Money News
Date: 12/09/2017
Time: 6:25 PM
Compere: Steve Price
Interviewee: Dr Rachel David, CEO, Private Healthcare Australia


STEVE PRICE: Joining us on the line is Dr Rachel David, CEO of Private Healthcare Australia.

Good to talk to you, Doctor.

RACHEL DAVID: G’day Steve.
STEVE PRICE: So this would be almost like a reverse lifetime health cover, right?
RACHEL DAVID: Yes. What we’re thinking of doing is for people that come off their family’s health insurance as early as 19 or 20 years old …
RACHEL DAVID: Yeah, well look, we’re thinking of giving them a discount on their premium. At the moment, young people are struggling with a lot of issues; housing affordability, high rents, often paying off their education, and high utility bills on top of that; so we’re thinking if we can give them a discount to get them started with private health insurance, that will set them up for life, and actually help take the pressure off premiums for older people, because we know that under our system, if younger and healthy people join, it helps actually put downward pressure on premiums for older people that might need to claim more.
STEVE PRICE: You’ve tried – as an industry – you’ve tried a whole lot of things. I mean, making it clear that you don’t need cover for health issues that older people need to be covered for, saying that you can get discounted gym membership and that sort of stuff. This is the next natural step, is it?
RACHEL DAVID: Well it is, but on its own it’s probably not enough, and I think we need to be quite clear about what value there is in private health for younger people as well. So, we are very keen to help young people understand some of the risks that they face, in terms of the health risks that they face when they are leaving the nest and going to set up on their own. These are things like accidents, sporting injuries, mental health conditions that can mean that they need to take considerable time off work, and it might mean that they can’t- and these are conditions that aren’t often treated quickly in public hospitals either.
STEVE PRICE: Can’t begin to tell you the number of times I’ve handed over my private health insurance card for one of my daughters to go and get physio.
RACHEL DAVID: Well that’s right, and one other issue that’s very important for young people is good dental care. If you’re in the job market, if you’re looking for a partner, you might have a profile up on Tinder. Having bad teeth is an absolute no-no, and I think that the demand for good quality dental care is pretty high in this age group, and we know that 90 per cent of dental care in Australia that’s delivered to low- and middle-income earners is reimbursed in some way by private health.
STEVE PRICE: Throw some numbers at me. What sort of savings are you thinking you could offer up if you manage to design this in the right way?
RACHEL DAVID: So look, what we’re thinking of is that we’ll give people that join before the age of 30 a two per cent discount per year up to a 10 per cent discount on the premium, and the total value of that will depend a little bit on the policy that they take out. There are some cheaper policies available for younger people, but if they think they need a higher level of cover, because it’s a percent, they’ll get the equivalent amount off that policy, and I think that in addition to some of the other things that we offer to younger people like subsidised dental care and some of the other extras like pilates and gym memberships, for example, I think we’ll be able to offer them quite a good deal if they do consider private health insurance.
STEVE PRICE: What’s your dropout rate around that age, 19, 20?
RACHEL DAVID: Well, at the moment we’re not seeing a high dropout rate, but what we’re seeing is a number of people that would normally come into private health insurance when they leave home, we’re seeing that really plateau at the moment, and of course, people aged over 50 who know they need to claim, that rate is going up and up, so the risk is that we’re getting a pool of people in private health insurance who are very high claimers, and that makes premiums go up for everyone. A healthy private health insurance system has people that are of all ages, and I think that what we need to do is to improve the value that we’re offering to younger people, both by discounting the product and improving what we give them, to attract more people in.
STEVE PRICE: Yeah, good luck with it. I appreciate you joining us tonight. Thanks a lot, Dr Rachel David.
RACHEL DAVID: Thanks Steve.
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