Millions of Australians are being warned they could forfeit thousands of dollars in unclaimed health insurance benefits, with a crucial deadline looming at the end of the year.
The Looming Deadline for Health Fund Extras
A revealing study from Money.com.au has uncovered that approximately 15 million Australians with private health cover have just one month to utilise their 'extras' before they vanish. The majority of health funds reset their policies on New Year's Day, meaning that from January 1, any unclaimed benefits for services like dental check-ups, physiotherapy, or optical care will be wiped clean.
Alarmingly, the research found that up to 40 per cent of policyholders were completely unaware that their unused entitlements would expire on December 31. This knowledge gap is costing members dearly, with about 31 per cent of Aussies admitting they had left some benefits unused in the past year. A further 15 per cent confessed to having used very little or none of their extras allowance.
Thousands at Risk of Being Lost
Money.com.au's health insurance specialist, Chris Whitelaw, issued a stark warning, stating that Australians are on track to lose a significant amount in benefits by the year's end. "Australians are effectively walking away from thousands of dollars in value every year," Mr Whitelaw said. He emphasised the urgency of the situation, noting, "Many people don't realise those benefits vanish overnight on December 31. It's a classic use it or lose it scenario."
The study also highlighted generational differences in engagement with health funds. Older Australians were more likely to be uncertain about their available benefits, potentially due to their general attitude towards health insurance. Conversely, about 19 per cent of Millennials admitted to not using their extras in 2024, a figure that suggests their generation may be forfeiting the most money overall.
Background of Rising Insurance Costs
This warning comes at a time when Australians are already grappling with rising living costs, including a significant hike in private health insurance premiums. Earlier this year, premiums increased by a national average of 3.73 per cent, marking the largest rise since 2018.
Government data revealed substantial variation between providers. Police Health Limited imposed the most severe increase at 9.56 per cent, while AIA Health Insurance and NIB policies rose by averages of 5.7 per cent and 5.79 per cent respectively. BUPA HI policyholders saw a 5.1 per cent jump.
At the other end of the scale, customers of HIF (Health Insurance Fund of Australia) experienced the smallest rise of just 1.91 per cent. Other modest increases included Phoenix Health Fund at 2.43 per cent, and St Luke's Medical and Hospital Benefits Association and Teachers Federation Health Ltd at 2.88 per cent and 2.94 per cent respectively.
Analysis by consumer group Choice showed that premium increases also varied dramatically by coverage level. Across the five major insurers, 'basic' cover rose by an average of 0.8 per cent, 'Bronze' tiers by 2.5 per cent, and 'Silver' by about 3.2 per cent. Most strikingly, 'Gold' level cover and its equivalents saw a massive 12.6 per cent average increase.
With around 15 million Australians covered by private health insurance, the message is clear: policyholders must review their funds and book appointments for dental, optical, and physio treatments before the December 31 deadline to avoid losing their hard-earned benefits.
