Drop private health extras cover - consumer body advises

Following the announcement that the Federal Government will permit private health insurance premiums to increase by 5.59%, consumer body Choice is encouraging health fund members to consider dropping their extras insurance unless they are confident of receiving more in benefits than they are paying in premiums.

The organisation says fund members need to weigh up whether they do get financial benefits from their extras insurance which covers costs such as dental check-ups. Choice says an analysis of extras cover shows low average payout rates and savings of up to 45% available to consumers who drop it.

According to Choice, the 5.59% average premium increase will see a 48.3% cumulative premium increase since 2009 and comes two weeks after Medibank announced a 58% jump in net profit.