The ‘for profit’ way of operating a health fund is not meeting customer needs, while the not-for-profit funds in the Members Own group are growing rapidly.
A recent study shows that during 2016, Australians abandoned private health insurance at a rate that exceeded new arrivals to the market. Does this signal the beginning of the end for private healthcare in Australia? Not at all, but the source of true value for the consumer is certainly shifting towards the not-for-profit model.
Here’s what’s going on…
Healthcare service providers – such as specialist medical staff, dentists and physiotherapists – are raising their prices. When this happens, insurance companies are forced to raise their premiums to compensate. The same thing would happen in car insurance if car parts manufacturers continuously raised their costs.
But that only explains half the story. It doesn’t explain why health cover benefits are decreasing at disproportional rates for so many Australians.
As it turns out, benefits aren’t decreasing across the board. It’s the customers of the for-profit private health companies that are the most affected.
The well-known for-profit funds (Medibank/ahm, Bupa, and NIB), operate to make money for their investors or overseas owners, and when healthcare service prices go up, their premiums increase and in some instances they are forced to reduce member benefits to maintain shareholder profit.
This means that the member ends up paying more for less, whilst the investors still get their cut.
Customers have begun to recognise that the old model of for-profit healthcare doesn’t provide as much value anymore. As a result, data published by the Australian Prudential Regulation Authority (APRA) shows that the for-profit funds have lost market share.
Is there a solution for you, the customer?
Yes. All you have to do is follow the market share. Over 2.6 million Australians are already with a Members Own fund, and there’s no reason why you can’t be part of the movement.
The APRA data shows that the not-for-profit Members Own health funds grew their market share in 2016, recording an increase in total policies of 57,661. In a slow- or negative-growth market, this is especially worth paying attention to.
How is this possible?
Members Own Health Funds is comprised of 17 not-for-profit and mutual health funds, each of whom share the belief that the not-for-profit model is a better alternative to for-profit health insurance.
A key advantage of the Members Own Health Funds approach is that there are no shareholders or overseas investors. The health requirements of members are put first. This means that policy benefits aren’t cut to make up for lost shareholder profit margins.
A further look into the statistics reveal that the policyholders are also able to access a more generous benefits package (as a percentage of contributions) than members of the big for-profit funds.
Held side by side with the for-profits, Australian Government data shows that Members Own Health Funds offer a significantly higher benefit to contribution ratio. Where the for-profits managed to provide health benefits equal to just 84.7% of their members’ contributions in 2016, the Members Own health funds achieved an industry high total of 88.7%.
This literally means more bang for your buck.
Members Own funds also achieved a remarkably low share of customer complaints relative to their market share.
We don’t promise the world, just health insurance from our not-for-profit funds that deliver better coverage, more benefits and make you happier.
Anyone ready to get the most out of their health insurance are encouraged to contact the experts and get started!
Company Name: Members Own Health Fund
Contact Person: Henry Guhl
Address:1/87 Little Malop St
State: VIC 3220