Health insurers are disadvantaging single parents already struggling with rising costs of living by charging them higher premiums to add children as dependents than other families.
A Choice analysis published on Thursday revealed single parents often face increases of up to 70% when switching to a family policy to add children as dependants, when most two-parent families don’t face any increase in premium.
Choice’s health insurance expert who led the analysis, Mark Blades, said the situation is unfair. “If an insurer is happy to add a child to a couple’s policy for free, they should do the same for single parents,” he said.
In one of the worst examples, Choice found NIB-brand funds – which include AAMI, ING, Priceline, Suncorp, Real and Seniors – charged single parents more than couples for gold hospital cover policies.
Private health funds, including Medibank, Bupa, and HCF, don’t charge couples anything extra to insure their children as dependants, and those that do only charge 10% at most.
However, the analysis found that even the policies which penalise single parents the least, such as Medibank Bronze Plus Assured, still make single parents pay a 33-43% premium increase compared to a singles policy.
“If we look at who are the best and worse, the reality is that they’re all doing a bad job,” Blades said.
While health insurance is not supposed to discriminate on the basis of gender, Blades said by pricing single parents – 80% of whom are mothers – out of health insurance, it indirectly does so.
“A single parent family would typically only have the one income, so it’s all the more important that they’re not discriminated against for not having second income stream, and we think the pricing should reflect that,” he said.
The private health insurance industry posted a net profit of $2.2bn last financial year, according to the banking regulator.
Terese Edwards, the CEO of the National Council of Single Mothers and their Children, said the effect of “disproportionately harsh” premiums for single mother families has gotten worse as cost of living increases.
“Particularly around dental, that’s where the rubber hit the road. Women were really caught because orthodontics work and dental work for children, it’s not unusual, but it is highly expensive.”
Edwards said the window of time to get repairs and preventive oral health work often creates a “real bind” for single mothers.
Edwards heard from women saying: “We can’t afford to keep our health insurance, but we can’t afford not to be with it.”
Without any public system offering dental cover, single mothers often “felt quite trapped in that process”.
Edwards said single mothers with children with special needs were also especially affected by being priced out of really high premiums.
Ed Close, NIB’s chief executive of Australian Residents Health Insurance, said: “All our product tiers (basic, bronze and silver) for a single parent hospital policy [are] priced lower than a couples policy, with the exception of gold single parent hospital cover which is priced slightly higher than the couples policy.”
“A number of factors influence pricing on our products, notably, claims utilisation which can vary by product and policy type,” Close said.
A Bupa spokesperson said “single parents can save about 15% in most cases on hospital policies cover compared to having family cover”.
