New research from Roy Morgan has revealed a big decline in the proportion of people with private health insurance who consider it essential, but pre-Boomers and Baby Boomers are still the strongest supporters.
In 2014, nearly two thirds (65.8 per cent) of fund members agreed it was essential to have private health insurance. The figure has declined each year since, reaching 56.9 per cent in August 2018.
But the level of agreement among pre-Boomers (born pre-1946) was 77.2 per cent and among Baby Boomers (1946-1960) it was 68.5 per cent. These figures compared to only 38.2 per cent among Gen Z (1991-2005).
For many years, Roy Morgan has been measuring the attitudes of fund members to 10 key statements related to how they feel about health insurance. Since 2014, the trend across all 10 statements has been adverse.
Although most fund members (72.1 per cent) still agreed that “above all else, private health insurance was about knowing that you’ll be able to cover the cost of big medical expenses if they arose, the measure has fallen from 77 per cent in 2014.
Most members (68.9 per cent) also agreed that health insurance gave them peace of mind, but this also gradually declined from 74 per cent in 2014.
The percentage of fund members who agreed it was difficult to understand what they were covered for increased 8.1 per cent to 44.4 per cent.
Millennials (1976-1990) are a major growth area for private health insurance, as they enter the life-stage where they generally have more responsibilities with families and mortgages. This was reflected in them being well above average in agreeing with issues related to the cost of health insurance, such as “I want the cheapest” and “the only reason to have it is to avoid paying extra tax”.
As would be expected, it was the youngest generation who were the least engaged in private health insurance. Gen Z, who are aged 14 to 27, had very low levels of concern related to health issues and were more likely to rely on recommendations from friends and family in choosing a fund.
Roy Morgan’s Industry Communications Director Norman Morris said the major decline in the number of fund members who thought it essential to have private health insurance was likely a response to the lack of perceived value, due to cost and uncertainty about what was covered.
“This research has only covered the attitudes of private health fund members and so it’s likely people without health insurance are even more adversely predisposed towards it,” Mr Morris said. “This makes it a challenge to attract new members as well as retaining existing ones.
“With health funding being a major concern for both state and federal governments, it is vital they and the health funds continue to promote the benefits of health insurance. Any decline in fund membership will lead to more pressure on the public system and, as a result, increased government funding.”