Survey shows Value of Health Cover

08 Jun 2016Media Releases

Private Healthcare Australia’s Annual Survey of High Claims has highlighted the value of health insurance, particularly for younger Australians, with funds paying out more than $6 billion in benefits for individual claims over $10,000 in 2015.

PHA CEO Dr Rachel David said the report found an increase of 21% in what are known as “high claims” – meaning that nearly half of all payments for hospital treatment by Australian health funds are now for claims above $10,000.

“With today’s numbers showing that treatment for an unexpected and severe illness such as a stroke or cancer can regularly cost from $10,000 – $50,000 and at times more than $300,000, it is easy to understand why health cover provides peace of mind for more than 13 million Australians,” Dr David said.

“It also underscores why both health fund members and the public system benefit from a sustainable private health insurance system.”

Recent research shows that 84% of Australians with health cover believe they are getting value for money but are concerned about ongoing affordability.

“Many of these high claims relate to hospital stays well in excess of 100 days. Providing quality care with a choice of doctor and a choice of hospital for long stays and in the treatment of such severe and debilitating conditions is a very worthwhile return on health fund premiums – but we must keep premiums affordable.”

Dr David said the 2015 survey also underlines the high individual claim costs for younger Australians, particularly for those experiencing prolonged mental health issues or cancer.

“Young people often believe they are invincible and underestimate their likelihood of becoming sick or needing prolonged care. The PHA Survey identified the top 30 high claims for members under 30 years of age and many of the individual benefits paid exceed $10,000.

“In many cases, serious mental health conditions, including eating disorders, accounted for these admissions. It is notoriously difficult for individuals to accurately assess their risk of developing these conditions.

“There has been much publicity about the tax and financial benefits of younger Australians taking out cover to avoid the Medicare surcharge and the Lifetime Cover loading.

“No-one under the age of 30 wants to think they may end up needing medical treatment costing in excess of $10,000, or even $100,000 – but many do and young people can shop around to find health cover which is specific to their needs.

“The High Claims Survey demonstrates the contribution health insurance makes to individuals during periods of sudden illness or accidents as well as to Australia’s broader healthcare system,” said Dr David.

Notes to Editors

Private Healthcare Australia’s Annual Survey of High Claims found that private health funds paid 298,305 claims where the benefit payment for the episode of care was more than $10,000.

This is an increase in the number of high claims on the previous reporting year of 21% with benefits paid exceeding $6.1 billion. This represents 45% of benefits paid out on behalf of members for hospital treatment during 2015.

PHA’s Annual High Claims Survey analyses the nature and magnitude of high claims met by health funds over the past 12 months and is collated using survey data from 33 Australian health funds which in total represent 100% of the private health insurance industry.

Of the 298,305 claims:

  • 11 cost more than $300,000
  • 57 cost more than $200,000
  • 652 cost more than $100,000
  • 9,883 cost more than $50,000
  • 39,368 cost more than $30,000
  • 114,740 cost more than $20,000
  • 183,565 cost between $10,000 and $20,000

Highest Claim for Selected Groups

  • Cardiovascular disease: $446,803 for the treatment of aortic aneurysm
  • Mental Health: $117,820 for the treatment of dementia
  • Cancer: $255,382 for the treatment of bowel cancer
  • Diabetes: $127,503 for the treatment of type 2 diabetes mellitus with peripheral angiopathy, with gangrene


    Media contact: Jen Eddy 0439 240 755