Health Insurers Offer Big Incentives for Customers

The race to attract health insurance policyholders has intensified, as health insurers ramp up their efforts with lucrative offers like up to eight weeks of free coverage and additional perks. This strategy aims to lure customers but raises questions about the long-term cost impacts for both consumers and the industry.

Health insurers are breaking from their usual schedule of promotions around the end of the financial year. Traditionally, tax-related deadlines prompt a surge in policy switching leading up to June 30, but this year, the battle for market share is lingering well into the new calendar year. Analysts report nearly half of the insurers reviewed are now offering enticing deals to entice customers to join or switch providers.

Promotions are varied but often involve free weeks of coverage, bypassed waiting periods, and additional sweeteners like gift cards or loyalty points. Medibank, for instance, is offering up to eight weeks free along with loyalty points worth up to $500, while Bupa is running a similar eight-week free campaign with added perks until February 12. However, fine print can make the value of these deals more complicated than they seem.

The broader industry impact appears significant as competition drives up customer acquisition costs for insurers. While consumers stand to benefit from short-term savings, experts warn that these promotions often come with strings attached. Hidden restrictions, such as extended commitment periods or delayed benefits, can reduce the allure of these incentives. Analysts also suggest that individuals carefully calculate annual costs and evaluate whether extras cover aligns with their financial needs.

Consumers switching policies must also consider rollover impacts, such as whether benefits claimed under one insurer will affect entitlements under a new policy. Families with dependents over 18 should closely review eligibility requirements, as rules regarding their coverage can vary between insurers. Moreover, calling a current insurer may yield as-good-or-better retention deals without the hassle of switching.

Source: The Australian