Private health insurance and the illusion of choice.

• Jurisdiction: Australia
• Author: Harley, Kirsten
• Date: 01 March 2013

The number of people with health insurance plummeted in the 1990s, but almost half the Australian population now has private hospital insurance and over half have ancillary or extras cover. But our research on private health insurance websites and interviews with consumers shows messages about increased choice don't always match reality.

Both Liberal and Labor governments have been encouraging us to purchase private health insurance since 1997. They've claimed that private health insurance promotes choice for the consumer and takes pressure off the public health system.

Private health insurers urge us to choose their products so we can take responsibility for our health and have more choice in our health care experience- including timing, hospital and specialists. And government tax penalties, higher rebates for people over the age of 30 and subsidies encourage us to finance our health care needs through private health insurance.

But our research found private health insurance may not increase choice in health care. In birthing and maternity care, in particular, people purchase insurance because they want choice of doctor and place of birth. But in...