The majority (70.9%) of people with private health insurance agree that "above all else, private health insurance is about knowing that you will be able to cover the cost of big medical expenses if they arise". This percentage fell from 77.5% over the past four years.

Following closely behind, 68.1% of respondents agree that “health insurance gives me peace of mind. This proportion declined from 74.5% over the last four years.

The biggest drop in agreement over the last four years was for “it is essential to have private health insurance” which declined by 10 percentage points to 56.2%.

These are some of the latest findings from market research firm Roy Morgan’s Single Source Survey (Australia) which is based on in-depth personal interviews conducted face-to-face with over 50,000 Australians per annum in their own homes, including detailed questioning of over 8,000 with members of health insurance funds. The latest results presented here are based on the 12 months to October 2018 compared to the same period in 2014.

The survey shows that since 2014, there has been an adverse trend across the 10 statements that have been tracked to understand attitudes to private health insurance.

Generational differences

The study show that there are some major generational differences in attitudes toward private health insurance that must be taken into account when marketing to these very diverse groups. An example of this is the high level of agreement (83.8%) among Pre-Boomers that “private health insurance is about knowing that you’ll be able to cover the cost of big medical expenses”, compared to only 56.5% among Gen Z.

Also, millennials have the highest level of agreement for “the only reason to have health insurance is to avoid paying extra tax”, with 22.5%, followed by Gen X on 20.1%. This is in contrast to pre-boomers with only 2.6% agreement.

As would be expected, it is the youngest generation who are the least engaged in private health insurance. Gen Z, who are aged 14 to 27 in this analysis, have very low levels of concern when it comes to health issues and in fact are more likely to “rely on recommendations from friends and family in choosing a fund”.

Mr Norman Morris, industry communications director at Roy Morgan, said, “Although the attitudes of private health fund members are reasonably favourable, over recent years they have generally shown an adverse trend, which should be of some concern to health funds and the government. It appears that the major decline in considering it essential to have private health insurance is likely to be a response to the lack of perceived value due to rapidly rising premiums and some uncertainty relating to what is covered.

“This research has only covered the attitudes of private health fund members and so it’s likely that people without this insurance are even more adversely predisposed towards health insurance. This makes it a challenge to attract new members as well as retain existing ones.

“To engage fund members and the population more in health insurance, this analysis has shown that there is a need to understand what motivates different generations to take out health insurance, as they cannot be treated as a single homogeneous group.”