Consumer perceptions on basic hospital cover and a new bronze - - PowerPoint PPT Presentation

Consumer perceptions

• n basic hospital cover

and a new bronze minimum standard

Study aim and methodology Context and purchase of basic hospital insurance Experience of having basic hospital insurance Response to the proposed introduction of the new categories of cover and bronze as a minimum level of cover

Agenda

Conclusions and recommendations

The study we present today was designed to provide the Private Health Ministerial Advisory Committee with an evidence base to support decision-making on the possible introduction of bronze, silver and gold categories of private hospital insurance cover, and a shift to the bronze level of cover as a new minimum hospital insurance product. Fieldwork consisted of 22 group discussions, 10 depth interviews and an n=1,026 online survey undertaken with basic hospital insurance policy holders in June 2017.

Recruitment of study participants

Previous research has indicated that many people do not understand the level of hospital cover they hold. Hence people recruited for this study were identified as ‘basic hospital insurance’ policy holders based on the level of premium they paid rather than their perception of their level of cover. The premium thresholds used for recruiting the participants were provided by the Department of Health. These were based on statistical analysis of 2017 private health insurance premium round data. The premium threshold accounted for:

• policy type (i.e. single, couple, family)
• jurisdiction of residence, and
• eligibility for the Private Health Insurance Rebate — this incorporated

different levels of rebate according to the participant’s: household income, and age.

Qualitative methods

The qualitative methods comprised 22 x 1.5 hour group discussions comprising 5-7 people and 10 in depth interviews, each involving one person and lasting one hour. All participants were recruited as being basic hospital cover holders with the exception of 3 groups of ‘potentials’. The sample was segmented by:

• How long people had held their cover for: + / - 24 months
• Life stage: young and midlife singles & couples (+/- 30 years of age),

midlife families & older Australians (65 years plus)

• Gender: separate groups were held for men and women where

population levels allowed for this

• Income: +/ - MLS brackets
• Location: Perth WA, Melbourne VIC, Bendigo VIC, Gold Coast QLD,

Brisbane QLD, Adelaide SA, the Adelaide Hills SA, Sydney NSW and the Central Coast, NSW.

Quantitative sample (online survey) Gender n= % Males 515 49% Females 509 51% Age Invites were sent nationally representative and natural fallout allowed based on basic hospital cover uptake 18-24 79 12% 25-29 109 10% 30-39 279 18% 40-49 211 18% 50-59 163 15% 60-69 118 13% 70+ 65 14% Location Invites were sent nationally representative and natural fallout allowed based on basic hospital cover uptake Victoria/Tasmania 295 28% New South Wales/ACT 349 32% Queensland 174 20% South Australia/NT 104 9% Western Australia 102 11% Greater Capital city areas 751 70% Regional/rural/remote 273 30%

A quantitative method was adopted to add a level of depth of rigour to this project and enable the Private Health Ministerial Advisory Committee to make broader generalisations about the population. A 10-minute online survey of a nationally representative sample of 1,026 Australians with basic hospital cover was adopted to further understand the drivers and barriers of hospital cover take up and response to the bronze product.

Context and purchase of basic hospital insurance

a: 68 Drummond Street, Carlton Victoria 3053 p: +61 (0)3 8648 3418 w: wheretoresearch.com.au e: info@wheretoresearch.com.au

The public system: just as good… but ultimately not to be relied upon

Taking out private hospital insurance: Peace of mind, shorter waiting times, knowing they would be covered in a private hospital and being able to choose own doctor were the main reasons for selecting private health insurance.

C.2. From the list below, please select all the options that reflect your thoughts and capture why you took out private hospital cover Base: Total, n=1,024; Aged 18-24 n=79, 25-39 n=388, 40-59 n=374, 60+ n=183 Single cover n=418, Couple cover n=278, Family cover n=328; Have extras cover n=771, No extras cover n=253

61% 59% 49% 38% 31% 28% 26% 21% 20% 14% 8% 2%

Peace of mind It allows shorter waiting times for treatment Knowing I would be covered in a private hospital Being able to choose my doctor Avoid Medicare Levy Surcharge Because of my age Avoid Lifetime Health Cover premium loadings Public system doesn’t provide adequate access/care Being able to get the Private Health Insurance Rebate Everyone I know has private health insurance To have a baby / for my kids Other Type of Cover Single Extras Cover Yes Age 25-39 40-59 60+ Couple Family No 68% 50% 59% 70% 55% 68% 61% 62% 58% 59% 41% 56% 82% 57% 68% 53% 61% 56% 53% 31% 49% 67% 45% 58% 47% 50% 47% 30% 23% 36% 61% 31% 53% 33% 39% 36% 10% 38% 40% 23% 31% 29% 34% 34% 23% 5% 15% 28% 52% 29% 38% 16% 25% 36% 19% 33% 28% 21% 27% 23% 29% 30% 17% 26% 15% 24% 20% 20% 22% 20% 22% 19% 9% 14% 20% 31% 20% 23% 18% 21% 19% 29% 20% 9% 8% 16% 11% 15% 15% 11% 8% 16% 7% 1% 3% 3% 21% 10% 3% 1% 0% 2% 3% 2% 1% 2% 2% 2% 18-24

Young people in their 20s tended to assume they would not need hospital care in the near future (except for existing health conditions, sporting injuries). Families told us that the birth of a child and the subsequent need to cover their children was a key driver to initial take up cover – and finishing a family the cue to take up of basic cover. Midlife singles / couples were similar in attitude to families, but without the additional emotional driver that children provided (or the driver to taking out top cover that obstetrics gave). Older Australians typically saw private health insurance as something were now ‘in for life’.

C.4 Why you took the cover you chose? Base: Total, n=1,024; Aged 18-24 n=79, 25-39 n=388, 40-59 n=374, 60+ n=183 Single cover n=418, Couple cover n=278, Family cover n=328; Have extras cover n=771, No extras cover n=253

Type of Cover

Single

Extras Cover Yes Age

25-39 40-59 60+ Couple Family

No

18-24

Taking out basic hospital insurance: some guided by what is cheapest, others looked for (or were nudged) by a complex combination of factors. It appeared likely that no one factor overwhelmingly decided their ultimate cover outcome, or that they necessarily had full control over the process.

19% 30% 37% 59% 38% 52% 27% 40% 37% 30% 30% 35% 56% 36% 49% 32% 38% 40% 53% 24% 31% 31% 26% 37% 35% 34% 25% 19% 25% 28% 18% 28% 21% 19% 21% 29% 36% 13% 16% 16% 19% 15% 19% 18% 17% 27% 13% 11% 11% 13% 10% 19% 15% 10% 19% 13% 13% 11% 8% 14% 20% 15% 8% 10% 16% 12% 12% 11% 11% 17% 13% 11% 11% 11% 10% 10% 9% 11% 12% 11% 8% 14% 8% 10% 10% 11% 6% 13% 10% 10% 5% 6% 8% 7% 8% 5% 6% 6% 8% 15% 6% 4% 2% 7% 4% 5% 6% 4% 2% 3% 4% 6% 4% 4% 4% 4% 3%

39% 39% 32% 23% 18% 14% 13% 13% 11% 10% 7% 5% 4%

Got the highest level of cover I could afford Knowing I was going with a reputable insurance brand Get better quality care Got the cheapest level of cover I could Wouldn’t need cover for the conditions that weren’t listed on my policy Wouldn’t need cover for the conditions that had restrictions on them Careful analysis of the product disclosure statements Cover that the comparison website suggested Proximity of nearest public or private hospital Limited access provided by restricted cover was sufficient for my needs Don’t know / can’t recall First cover I came across when I searched online Other (specify)

Between basic and what else?

• Cheapest level of cover (23% quantitatively) vs best

quality care they can afford (39% quantitatively).

• Judging and juggling private health cover options and

broader household budget.

• Not necessarily aware of the range of options.
• No one wanted to believe that they were making a

decision on price.

• People found the information search process difficult:

‘health insurers hold all the cards’.

• ‘Potentials’ claimed that difficulty in understanding

and comparing products was a key barrier.

• Impossible to judge risk.

Difficult to find information and compare Impossible to judge risk

B.8 Using the sliding scale below, slide the button to the position that best represents how you feel about your knowledge about what you are covered for with your current private health provider… Base: Total, n=1,024; Aged 18-24 n=79, 25-39 n=388, 40-59 n=374, 60+ n=183

The quantitative study confirmed the lack of confidence people have in their knowledge of their cover… the following chart shows response to a question asking how unsure/confident respondents felt about their knowledge about what they were covered for

3% 7% 4% 2% 4% 15% 25% 25% 17% 21% 23% 28% 28% 22% 26% 48% 38% 38% 55% 42% 11% 4% 4% 4% 6%

1 - Very Unsure 2 3 4 5 - Confident

Overall 25-39 years 40-59 years 18-24 years 60+ years

“You don’t want to think that price is the main driver, that you have a bottom drawer product.”

I know I probably wont need a hip replacement but will I need urology?”

“I was going to drop my health cover but when I called my health fund they said you would get slugged with the surcharge so I said fair enough. But I don’t really know if that is true.” “It was the lifetime

• loading. I worked out the

difference in taking it

• ut now versus in 15

years time when I’ll need some major dental work… it was cheaper to get in now.”

“It took me a year and a half to decide on one. I kept picking it up and putting it aside again because it was too hard. You can’t compare apples with apples.”

Illustrative quotes

B.3 How long have you been a member with your current health provider? Base: Total, n=1,024; Aged 18-24 n=79, 25-39 n=388, 40-59 n=374, 60+ n=183 Single cover n=418, Couple cover n=278, Family cover n=328; Have extras cover n=771, No extras cover n=253

12% 19% 15% 10% 4% 3% 5% 3% 2% 25% 3% <12 months 1 -2 years 3-4 years 5 years 6-7 years 8-9 years 10 years 11-12 years 13-14 years 15+ years Don’t know

Type of Cover Single Extras Cover Yes Age 25-39 40-59 60+ CoupleFamily No

16% 17% 8% 8% 13% 12% 10% 10% 16% 42% 22% 13% 11% 22% 13% 20% 18% 21% 10% 20% 14% 14% 14% 16% 17% 14% 18% 12% 12% 9% 8% 12% 6% 11% 11% 7% 1% 8% 4% 2% 4% 5% 5% 5% 3% 1% 4% 5% 2% 4% 1% 5% 4% 3% 3% 5% 6% 3% 3% 6% 5% 5% 4% 1% 2% 5% 2% 3% 3% 4% 3% 3% 0% 2% 3% 2% 3% 2% 1% 2% 2% 7% 7% 29% 46% 23% 34% 18% 27% 20% 7% 1% 4% 2% 2% 3% 5% 3% 2%

18-24

The quantitative study highlighted one of the potential effects of these barriers to shopping around — the long periods of time people stay with insurers. Over 50% of the sample had been with their provider for five and over years. 25% had been with their provider for over 15 years.

“It’s easier to just keep following on with what you have got.”

“I’m just lazy I suppose.” “Reading the product information statement in detail…. Hah! That’s a good laugh!”

“Who has time to actually look at their health insurance? I know I don’t. But I know that I should.”

“I’d like to shop around… but it makes me feel really nervous.”

Illustrative quotes

Experience of having basic hospital cover

Experience of having basic hospital cover

Having and using their extras cover dominated experience of using health cover day to day. Premiums are going up and consumers are questioning the value. Out of pocket fees the biggest bugbear. Accessing public and private: a Venn diagram rather than parallel experiences.

extras

“The premiums go up and up and you don’t get much back.”

“If there is an emergency then there is no choice.”

“I know I am only covered for day surgery so I tell the staff don’t let me stay the night! You have to send me to another hospital.”

“I’ve been thinking I should think about self-insuring. I could be putting a bit aside each month ready to use when I need it.”

“Everyone says whatever you do, don’t say you’ve got private health!”

Illustrative quotes

D.2 Thinking about the last time you used your private hospital cover, on a scale of 1 to 7, where 1 means you strongly disagree, 4 means you neither agree nor disagree, and 7 means you strongly agree, please tell me how much you agree or disagree with the following statements… Base: Those who had used their private hospital cover in the last 3 years, n=556; Note: Data labels removed where results <3% for easier reading

5% 5% 10% 9% 15% 10% 19% 32% 3% 6% 9% 10% 10% 13% 20% 56% 61% 53% 61% 56% 63% 58% 39% 20% 19% 18% 11% 9% 11% 6% 7% 15% 14% 13% 10% 9% 6% 5%

I felt like my insurance provided good value for money I felt like I got better quality care because of my health insurance I was covered for everything My private health insurance made no difference to the care I got I was surprised by out-of-pocket expenses I was not completely clear what was covered by my insurance and what was... I wasn’t covered for items that I thought would be included in my cover I felt my treatment suffered because of the kind of cover I had

Strongly Disagree (1) Disagree (2) Neither agree nor disagree (3-5) Agree (6) Strongly Agree (7)

Judgements of the experience of having cover characterised by polarisation and ambivalence.

I felt like my insurance provided good value for money I felt like I got better quality care because of my health insurance I was covered for everything My private health insurance made no difference to the care I got I was surprised by out-of-pocket expenses I was not completely clear what was covered by my insurance and what was and what was covered by Medicare I wasn’t covered for items that I thought would be included in my cover I felt my treatment suffered because of the kind of cover I had

“I had my baby... $15k out of

• pocket. I was livid. I felt like I

was taken for a ride… Potentially you can be up for tens of thousands of dollars if there are complications.”

“My father in law had a heart attack and they took him to the private hospital and he ended up paying $10,000 because he wasn’t covered.” “Even if you have private health insurance, if you go and see a specialist you still have a lot of gap fees. My father had to pay $20,000 out of pocket.” “I had to have an emergency

• appendectomy. Even

with PHI I was $2,000

• ut of pocket. Had I

been thinking straight I’d have been better off in the public system.”

“I went in to get my foot done and they said you aren’t covered for it. I was so upset but then we worked

• ut a payment

plan.”

Illustrative quotes

Response to the introduction of the new categories of cover and bronze as the minimum standard

“To make it easier to compare private health insurance products, changes are being considered to categorise products as either Bronze (minimum cover), Silver (medium cover) or Gold (comprehensive cover). Each level would have to cover certain conditions. This would help people compare ‘apples with apples’ when they are shopping for private health insurance. Other things to know: insurers could still charge excesses; Silver and Bronze products would still have exclusions (but they would be clearly defined); and insurers would not be able to put in place restrictions or co-payments.”

D.2 E.2 Using the sliding scale below, slide the button to the position that best represents how you feel about this proposed change…Base: Total, n=1,024; Note: Data labels removed where results <3% for easier reading

When asked how they would feel about the introduction of the new categories of cover, overall response in the quantitative study was positive but uncertain.

3% 3% 3% 7% 3% 8% 8% 9% 11% 7% 10% 11% 27% 24% 28% 39% 42% 38% 51% 44% 46% 42% 34% 38% 36% 30% 18% 20% 18% 8% 11% 14% 6%

It is a bad idea Make it harder to compare information Make is harder to understand what I am covered for Make no difference to me Decrease competition in the health insurance market It will make the health system less fair It will increase the burden on the public system Left - 1 2 3 4 Right - 5

It is a good idea Make it easier to compare information Easier to understand what I am covered for Make a big difference to me Increase competition in the health insurance market It will make the health system fairer Decrease the burden on the public system

In the qualitative discussions, once people had a chance to talk through the implications of the change people tended to be more positive. Key benefits:

• introduce a sense of

transparency into the system

• remove disincentives to shop

around, and

• increase their knowledge of

what they were actually covered for. The potential:

• introduce a much-needed watchdog into the system
• ‘force’ insurers to be more competitive, and
• possibly force poor performers out of the market.

Potential downside: insurers would be limited in their ability to offer tailored or flexible cover. The caveats… benefits rely on:

• insurers using uniform terminology
• information coming with plain English definitions of

key terminology, and

• a government comparison tool or website allowing

for easy comparison of policies.

“I feel at the moment they’ve got liberties to do whatever they want. … any system that’s put in place to regulate things is a good idea.” “It would also have to be about the fine

• print. It would

all have to be more transparent.”

“Half the reason I didn’t shop around for a better deal was that I was time poor. This makes me feel like I could do it.”

“It’s going to be better value for money than basic now. It does make you think, what the hell am I paying for?”

“The downside is that it would be less flexible, not able to be tailored.”

Illustrative quotes

E3 Using the sliding scale below, slide the button to the position that best represents how you feel about the introduction of Bronze as the new minimum private hospital cover insurers can offer… Base: Total n=1024; Female n=515, Male n=509

Introduction of bronze cover…. Cautiously welcomed

4% 9% 27% 47% 14%

1 - Very Negative 2 3 4 5 - Very Positive

Basic… Conditions covered Basic products must provide hospital cover for psychiatric care, palliative care, or rehabilitation (most likely being treated as a private patient in a public hospital - not a private hospital). They tend to have minimal coverage of other conditions – for example, the following might be the upper limit:

• Removal of tonsils and adenoids
• Minor gynaecological procedures
• Appendix removal and hernia repair
• Dental surgery (wisdom teeth)
• Colonoscopies and gastroscopies
• Joint investigations and reconstructions (but not replacement)

Private hospital costs & accommodation Often not fully covered (does not sufficiently cover costs for admission to a private hospital) Excess Maximum excesses allowed are $500 for singles and $1,000 for couples / families Bronze… Conditions covered Would provide cover for the following urgent and unpredictable service categories:

• Chemotherapy/radiotherapy (cancer treatment)
• Ear/nose and throat surgery (includes tonsils, adenoids, and

more services)

• Brain surgery (cancer, stroke)
• Palliative care
• Other bones/joints surgery (not including joint replacements)
• General surgery (e.g. abdominal surgery – liver, stomach,

hernias, appendix)

• Urology (urinary tract and reproductive organs)
• Breast surgery
• Bowel surgery
• Upper gastrointestinal surgery (digestive system)
• Vascular surgery (blood vessels)
• Thoracic surgery (lungs)
• Head and neck surgery

Private hospital costs & accommodation Covered in a private hospital for the services listed above, or as a private patient in a public hospital. Excess Maximum excesses allowed are $500 for singles and $1,000 for couples / families

Information provided on pricing

• Singles: for typical basic products this could cost approximately an

additional: $85 per year ($1.60/week, $3.20/fortnight, $7.10/month)

• e.g. annual premiums could increase from around $1,500 to

$1,585.

• Couples/Families, for typical basic products this could cost an

additional: $170 per year ($3.25/week, $6.50/fortnight, $14.17/month)

• e.g. annual premiums could increase from around $3,100 to

$3,270.

It clearly lifts minimum standards — in principle a good idea…. But there are worries about price

• A $85 (single) or $170 (couple/family) price rise would provide a

great deal more extra value for a reasonable price for people with very basic products.

• People who say they already have a decent level of cover worried

they might be expected to pay more for what they already have.

• A new $1,500/$3,000pa minimum cover would impact on people’s

ability to have private health insurance - a personal and equity issue.

• People who were taking out cheap cover primarily to avoid the MLS

and LHC felt that they were ‘being forced’ into paying more for something they didn’t really want or need.

And questions about value

• Some valued consistency, however others felt that bronze was

not tailored or flexible enough.

• Most questioned whether it would truly meet their needs:
• bronze unnecessarily covering conditions or treatment

that people felt they would access the public system for

• younger people saying they didn’t need private health

hospital cover for all of the conditions listed under bronze.

• Without knowing how to judge their risk to do with particular

conditions, people said they couldn’t make a call on whether

• r not the list of basic conditions was reasonable.

Doesn’t fix key bugbears

• The language and terminology is still relatively impenetrable

and would need to be a lot clearer and simpler if the change was to really make a difference.

• In addition, people would like to see a list of what was

excluded as well as a list of what was included.

• That it would not address the key issues that most have about

the health system (variability) and using private cover (gap fees).

“I’m thinking ‘oh boy, how much more am I going to have to pay.” “It would get rid of the illusion

• f cover.”

“I would hope it gets rid

• f the policies that don’t

meet anyone’s needs.”

“I’ve had PHI for 15 years and I haven’t needed any of these, so I’m thinking how much more is this going to cost?”

Illustrative quotes

“I know I don’t need hip and knee replacements but the rest? They need to let us know what our risk is.”

“You’d be worried about the price implications if you’re only getting PHI to avoid paying the rebate or loading.”

“You would still have a gap fee. If you went to go and see an

• ncologist you have to pay the gap

fee every time. Not many people could afford that, $200 a turn.” “Would you be able to add other conditions to bronze cover, without having to go up a whole new level? …. I’d like to swap hip and knees for something on the list.”

“But is basic enough until you get old and decrepit?”

Illustrative quotes

0% 0% 6% 73% 21%

1 - It is a bad idea 2 3 4 5 - It is a good idea

0% 1% 7% 70% 21%

1 - It will make it harder to… 2 3 4 5 - It will make it easier to…

Segment 1 Not feeling the value - 24%

This segment were more likely to have considered dropping their health insurance. They had typically taken out cover to address issues of public sector wait lists and to have extras cover but were questioning the extent to which they had received value. With Segment 2 they were most likely out of all the segments not to have used their cover in the last five years or at all.

0% 3% 4% 72% 22%

1 - It will make it harder to compare… 2 3 4 5 - It will make it easier to compare…

G O O D O R B A D I D E A ? E A S I E R O R H A R D E R T O C O M P A R E ? E A S I E R O R H A R D E R T O U N D E R S T A N D ?

7% 28% 41% 21% 4%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

6% 17% 36% 33% 8%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

S W I T C H T O A ‘ N O N - B R A N D ’ I N S U R E R

2% 17% 45% 26% 10%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

U P G R A D E T O H I G H E R L E V E L O F C O V E R D O W N G R A D E / D R O P E X T R A S

1 4 %

D R O P C O V E R ; C A N ’ T A F F O R D I T

7 %

D R O P C O V E R ; P A Y T A X I N S T E A D

1 3 %

D R O P C O V E R ; C O N D I T I O N S C O V E R E D D O N ’ T R E F L E C T N E E D S

3 9 % A G R E E

T H A T T H E Y W O U L D P A Y M O R E

3 8 % A G R E E

T H E Y W O U L D T A K E O U T / S W I T C H T O B R O N Z E

13% 2% 25% 21% 39%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

77% 6% 13% 1% 2%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

7% 21% 31% 24% 16%

1 - It is a bad idea 2 3 4 5 - It is a good idea

12% 18% 27% 23% 19%

1 - It will make it harder to… 2 3 4 5 - It will make it easier to…

Segment 2 Medicare Levy Surcharge avoiders - 14%

Like segment 1, this segment was more likely to have considered dropping their private health insurance cover, more likely to say they acquired the cheapest level of cover to address the Medicate Levy Surcharge and more likely to say that they had bad experiences where they weren’t covered for what they thought they might have been and less likely to have felt their cover had provided them with a sense of value.

9% 18% 22% 35% 16%

1 - It will make it harder to… 2 3 4 5 - It will make it easier to…

G O O D O R B A D I D E A ? E A S I E R O R H A R D E R T O C O M P A R E ? E A S I E R O R H A R D E R T O U N D E R S T A N D ?

9 2 % D I S A G R E E

T H A T T H E Y W O U L D P A Y M O R E

7 6 % D I S A G R E E

T H E Y W O U L D T A K E O U T / S W I T C H T O B R O N Z E S W I T C H T O A ‘ N O N - B R A N D ’ I N S U R E R

8 7 %

D R O P C O V E R ; C A N ’ T A F F O R D I T

7 8 %

D R O P C O V E R ; P A Y T A X I N S T E A D

5 7 %

D R O P C O V E R ; C O N D I T I O N S C O V E R E D D O N ’ T R E F L E C T N E E D S

12% 2% 33% 17% 36%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

U P G R A D E T O H I G H E R L E V E L O F C O V E R D O W N G R A D E / D R O P E X T R A S

2% 18% 68% 12% 0%

1 - It is a bad idea 2 3 4 5 - It is a good idea

0% 17% 78% 5% 0%

1 - It will make it harder to… 2 3 4 5 - It will make it easier to…

Segment 3 Satisfied but uncertain - 20%

In general, this segment appeared to be happy with their health insurance. They were less likely to consider dropping it, and more likely to report positive experiences of their use of cover.

1% 15% 72% 11% 0%

1 - It will make it harder to… 2 3 4 5 - It will make it easier to compare…

G O O D O R B A D I D E A ? E A S I E R O R H A R D E R T O C O M P A R E ? E A S I E R O R H A R D E R T O U N D E R S T A N D ?

3% 16% 66% 14% 1%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

6% 15% 60% 18% 1%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

S W I T C H T O A ‘ N O N - B R A N D ’ I N S U R E R

2% 18% 60% 17% 2%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

U P G R A D E T O H I G H E R L E V E L O F C O V E R D O W N G R A D E / D R O P E X T R A S

1 3 %

D R O P C O V E R ; C A N ’ T A F F O R D I T

1 4 %

D R O P C O V E R ; P A Y T A X I N S T E A D

1 4 %

D R O P C O V E R ; C O N D I T I O N S C O V E R E D D O N ’ T R E F L E C T N E E D S

2 9 % D I S A G R E E

T H A T T H E Y W O U L D P A Y M O R E

1 8 % D I S A G R E E

T H E Y W O U L D T A K E O U T / S W I T C H T O B R O N Z E

38

0% 0% 1% 28% 71%

1 - It is a bad idea 2 3 4 5 - It is a good idea

0% 0% 4% 19% 78%

1 - It will make it harder to… 2 3 4 5 - It will make it easier to…

Segment 4 Health insurance loyalists - 13%

This segment felt very knowledgeable about their cover and were convinced that their private hospital had delivered the peace of mind and quality care it promised.

1% 0% 0% 8% 91%

1 - It will make it harder to… 2 3 4 5 - It will make it easier to…

G O O D O R B A D I D E A ? E A S I E R O R H A R D E R T O C O M P A R E ? E A S I E R O R H A R D E R T O U N D E R S T A N D ?

55% 8% 28% 3% 6%

Stongly disagree/… 3 4 5 Strongly agree/…

15% 8% 14% 33% 30%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

S W I T C H T O A ‘ N O N - B R A N D ’ I N S U R E R

28% 3% 30% 23% 16%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

U P G R A D E T O H I G H E R L E V E L O F C O V E R D O W N G R A D E / D R O P E X T R A S

2 %

D R O P C O V E R ; C A N ’ T A F F O R D I T

3 %

D R O P C O V E R ; P A Y T A X I N S T E A D

8 %

D R O P C O V E R ; C O N D I T I O N S C O V E R E D D O N ’ T R E F L E C T N E E D S

7 0 % A G R E E

T H A T T H E Y W O U L D P A Y M O R E

6 8 % A G R E E

T H E Y W O U L D T A K E O U T / S W I T C H T O B R O N Z E

39

0% 0% 22% 72% 6%

1 - It is a bad idea 2 3 4 5 - It is a good idea

0% 4% 14% 75% 8%

1 - It will make it harder to… 2 3 4 5 - It will make it easier to…

Segment 5 The young ones - 13%

This segment was the youngest — 58% were under 35 — and in line with young people were more likely to believe that the public system was lacking but to be unsure about exactly what they were

• buying. They were also

less likely to do due diligence when purchasing health insurance — they were more likely to say that they bought the first cover they came across

• nline.

0% 1% 16% 78% 5%

1 - It will make it harder to… 2 3 4 5 - It will make it easier to…

G O O D O R B A D I D E A ? E A S I E R O R H A R D E R T O C O M P A R E ? E A S I E R O R H A R D E R T O U N D E R S T A N D ?

3% 4% 22% 44% 28%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

5% 12% 12% 41% 30%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

S W I T C H T O A ‘ N O N - B R A N D ’ I N S U R E R

2% 6% 11% 42% 39%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

U P G R A D E T O H I G H E R L E V E L O F C O V E R D O W N G R A D E / D R O P E X T R A S

7 7 %

D R O P C O V E R ; C A N ’ T A F F O R D I T

8 6 %

D R O P C O V E R ; P A Y T A X I N S T E A D

6 8 %

D R O P C O V E R ; C O N D I T I O N S C O V E R E D D O N ’ T R E F L E C T N E E D S

7 6 % A G R E E

T H A T T H E Y W O U L D P A Y M O R E

7 6 % A G R E E

T H E Y W O U L D T A K E O U T / S W I T C H T O B R O N Z E

40

10% 9% 29% 46% 5%

1 - It is a bad idea 2 3 4 5 - It is a good idea

8% 12% 27% 53% 0%

1 - It will make it harder to… 2 3 4 5 - It will make it easier to…

Segment 6 Pay more to get more - 16%

This segment was the

• ldest — 40% were aged

above 60 years. They were more likely to say they had the highest level of cover they could afford and value the peace of mind and quality care that came with private hospital insurance.

7% 9% 23% 61% 0%

1 - It will make it harder to… 2 3 4 5 - It will make it easier to…

G O O D O R B A D I D E A ? E A S I E R O R H A R D E R T O C O M P A R E ? E A S I E R O R H A R D E R T O U N D E R S T A N D ?

55% 12% 15% 11% 7%

Stongly disagree/… 3 4 5 Strongly agree/…

19% 13% 24% 13% 31%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

S W I T C H T O A ‘ N O N - B R A N D ’ I N S U R E R

33% 11% 29% 8% 18%

Stongly disagree/ disagree 3 4 5 Strongly agree/ agree

U P G R A D E T O H I G H E R L E V E L O F C O V E R D O W N G R A D E / D R O P E X T R A S

3 %

D R O P C O V E R ; C A N ’ T A F F O R D I T

5 %

D R O P C O V E R ; P A Y T A X I N S T E A D

1 3 %

D R O P C O V E R ; C O N D I T I O N S C O V E R E D D O N ’ T R E F L E C T N E E D S

4 1 % A G R E E

T H A T T H E Y W O U L D P A Y M O R E

3 8 % A G R E E

T H E Y W O U L D T A K E O U T / S W I T C H T O B R O N Z E

Conclusions and recommendations

Conclusions

• Basic hospital insurance holders are not aware of the

potential low levels of cover provided by basic hospital insurance.

• They cautiously welcomed the introduction of the new

categories of cover and the bronze minimum product.

• The categorising of products was not felt to go far

enough.

• Bronze was welcomed for its additional value – but not for

its inflexibility or for the potential for large price hikes.

Conclusions and recommendations (cont.)

Recommendation 1 Should the Government be inclined to proceed with the introduction of the new categories of cover, it is recommended that the following requirements also be applied:

• insurers are made to use uniform terminology, and
• insurers are made to provide plain English definitions of key terminology.

Recommendation 2 Provide additional signals promoting shopping around to accompany the introduction of the new categories of cover. Recommendation 3 Conduct a pricing exercise in relation to the introduction of bronze as a minimum cover: that is, an analysis of price/income elasticity for different consumer groups.

Thank you.