No Images? Click here May 2018 Do the health insurance funds resemble AMP?The Royal Commission generated devastating evidence that the AMP covered up serious shortcomings in its advice and its treatment of clients in respect of charging for advice when no adviser was available to the clients concerned. Historically it was built on shaky foundations of a large number of tied agents selling whole of life products with very high front end costs in the form of excessive commissions and paid junkets to exotic locations for its salesmen. That model was torn apart beginning in the 1980’s and in reality AMP has been desperately playing catch up ever since. Its financials showed steadily decreasing equity on its balance sheet over the past five years before the Royal Commission shredded its reputation. Health funds like AMP Now consider the major health funds in light of the poor disclosures and rip offs perpetrated by AMP and to some extent the banks. AHPRA figures indicate that in 2017 health insurers received $6.47 billion in extras premiums but paid out only $4.87 billion in benefits, creating a gap of $1.6 billion, or 24.73%. That gap is before any earnings on its reserves. We get better odds than that in a casino. Take a good look at television advertising by health funds and it is all focussed on selling extras cover not hospital cover! But try and separate extras premiums and payments from hospital cover premiums and benefits paid in your health fund and it will prove to be impossible because the health funds do not want their members to know that piece of vital consumer information! There’s a real story here for financial journalists wishing to dig out the truth. It’s not really insurance! True insurance is for disasters. We insure our homes against fire or storm damage because for most of us the loss of our home would be a personal disaster. We may insure our car comprehensively if it would be expensive to replace. But paying extras insurance to get an occasional bit of dentistry, an occasional pair of spectacles plus the odd bit of physiotherapy, chiropractic treatment or podiatry worth 75.2 cents in the dollar isn’t really insurance. It’s just a dumb way of recycling some of our money. Yes, sure the health funds will claim that they can send you to a cheaper dentist. That means the dentists they prefer to call a “preferred provider”. It doesn’t mean that that dentist was personally chosen by them, but rather that that was a dentist who was prepared to work for less and have restrictions placed upon what they could provide to their patients. However it’s likely that your regular dentist, who in many cases may be a far superior practitioner, won’t sign a preferred provider agreement with a health fund preferring to have a simple one to one relationship with patients. Extras health insurance truly is one of the dumbest forms of insurance. It’s also a source of continuous rip off of consumers. I wonder which financial journalist is willing to dig out the truth? Best wishes to all dentists, Graham Middleton The Synstrat Group are Australia's most experienced Dental practice business advisers, accountants, practice valuers and licensed financial advisers. The information contained herein is of a general nature and no specific action should be taken without individual advice. Synstrat Management Pty Ltd P. 03 9843 7777 ABN 57 006 295 325 If you are not the intended recipient of this communication please delete and destroy all copies of this message and telephone Synstrat on +61 3 9843 7777 immediately. If you are the intended recipient of this communication you should not copy, disclose or distribute this communication without the authority of Synstrat. Any views expressed in this communication are those of the individual sender, except wh ere the sender specifically states them to be the views of Synstrat. If you do not wish to receive this email in future, please reply to the sender requesting termination of service. |