A recently released industry report shows the largest 5 health funds account for 84.1% of the market. This leaves 27 insurers sharing the remaining 15.9% of the market. The report says that despite their size the smaller insurers play an important role in the market.

There are currently more than 30,000 complying health insurance products on offer to consumers. Not all these products are available to everybody as certain health funds only sell into niche markets or are restricted as to who can buy their products.

Importantly, the report mentions that consumers do not appear to be regularly checking to ensure their private health insurance coverage remains the most appropriate for their circumstances. Importantly, as health funds are preparing to increase their premiums the report notes that it is difficult for health funds to compete on price in the long term as large pricing differentials are unusually unsustainable.

The use of excesses, co-payments and exclusionary products has more than doubled in recent times. People are using these features to maintain health insurance affordability. The report says consumers are increasingly seeking to reduce the cost of private health insurance cover by excluding certain treatments from their insurance coverage.

HICA believes the use of exclusionary products is valid as long as consumers fully understand what they are buying and are aware of the consequences when the time comes to make a claim. It is wise to check your cover with an independent consultant such as HICA.

^{Source – Operations of Private Health Insurers, Annual Report 2009-2010}