'Peace of mind' the main reason for PHI

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'Peace of mind' is the main reason Australians maintain private health insurance according to new research from leading comparison company iSelect.

Its new survey of 2,000 Australians, conducted by Galaxy Research Australia, sought to uncover attitudes towards private health insurance following the announcement of this year's 3.95 percent average premium increase.

The survey found 'peace of mind' is the primary reason 58 percent of respondents maintain private health insurance. 

Almost half (48 percent) have private cover to reduce hospital costs while having a choice of hospital and doctor is the main reason for 43 percent. Less than one quarter (23 percent) have private health insurance to reduce tax through the Medicare levy surcharge.

Around one-in-two Australians with private health insurance believe it is expensive but worth it, while just over one-third (36 percent) say they are struggling to justify the cost.

Almost half (48 percent) of the survey respondents said they had taken some action in the past year about private health insurance, with 12 percent upgrading or taking out cover, while 11 percent downgraded or cancelled. Around the same proportion (49 percent) took no action because they are happy with their current insurer.

According to iSelect, "In effect the PHI landscape has maintained overall status quo, but within that there are age trends." It said the survey found younger people (18-34-year-olds) were more likely to upgrade or take out cover than people aged over 50, 26 percent compared to 3 percent.

Following the recently announced premium increase, which will take effect on 1 April, 68 percent of survey respondents with private cover said they would take some action - 38 percent said they would compare or switch their cover while 19 percent will downgrade or cancel.