For years experts have been warning of a death spiral in the private healthcare industry as young people abandon policies and drive up fees for other users, leading to more people leaving due to rising costs. Well recent figures from the Australian Prudential Regulation Authority have found young people are behind a surge in demand for private health cover, reversing a year’s long trend.
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00:00Every quarter, the Australian Prudential Regulatory Authority puts out figures on who's using
00:07private health insurance and what kind of policies they're getting.
00:10The last quarter found a really significant change.
00:14In fact, the last year has found this significant change, and that is young people under the
00:18age of 30 are driving demand.
00:21In the last quarter, people aged 25 to 29 were the biggest area of growth, an extra
00:2835,000 people, around 7% of that age population had taken out a private health coverage in
00:36the last quarter alone.
00:37Now, this is a pretty significant difference from previous years, where usually the number
00:43of people in that age bracket taking out private health insurance is nowhere near as big.
00:49In fact, the biggest age group of people taking out private health insurance is around the
00:5330 to 31 age group, where that private health, that Medicare levy surcharge kind of comes
01:00into play.
01:01So this is actually quite a significant reversal of trends.
01:03Okay, so what's behind the demand?
01:06There's a couple of things.
01:07The first is a recent policy change, which saw young people be able to be on their parents'
01:13policies for a little bit longer.
01:15That accounts for a chunk of these figures, but the private health insurance industry,
01:21the peak body for this industry, says actually what they're seeing is increased demand from
01:26young people for services that they feel either aren't covered by Medicare or incur a really
01:32long wait time, specifically mental health supports and treatment for things like endometriosis,
01:38drug and alcohol addiction, and also family planning and maternity services.
01:43They say that accounts for young people who sometimes have to wait years for these services
01:47under the public health system.
01:49What's the government had to say, Shalila?
01:52The federal health minister, Mark Butler, was on afternoon briefing yesterday.
01:56He pointed to these figures as an example of the health care system working as intended,
02:02that the private health system was an important aspect of the overall health mix.
02:07Here's what he had to say.
02:09There's been a pretty steady increase in private health insurance membership now for several
02:14quarters, really probably quite a number of quarters since COVID, and so to an extent
02:19it's a continuation of that.
02:20I mean, I haven't really been able to delve into the numbers in great, great detail, but
02:25my sense from the industry is among young people in particular, that reflects a desire
02:31for better mental health supports as well as the general options, the general range
02:37of options that private health insurance gives you.
02:41What you might have noticed there, Roz, is what the health minister isn't saying is that
02:45potentially the reason that young people are moving to the private health care system is
02:50because the public health care system simply isn't offering them the services that they
02:54either need or in a timely fashion.
02:57Shalila, thank you.