Satisfaction with private health insurers has declined to 2013 levels, as survey results show more than 10 per cent of Australians plan to leave their funds in the next 12 months and are shopping around.
The results, from Roy Morgan's Single Source survey of more than 50,000 Australians, found nearly all major health insurance providers had shown declining customer satisfaction in the past year, with overall satisfaction at 74.4 per cent, down from 76.3 per cent at the same time last year.
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Over the past three years, HBF has maintained the highest satisfaction level of the five largest funds at 80.2 per cent, followed by HCF (74.3 per cent), Bupa (73.6 per cent), NIB (70.9 per cent) and Medibank Private (70.1 per cent).
Satisfaction scores with most of the largest 16 funds decreased in the past year.
The findings come just one week after the Private Health Insurance Ombudsman announced that Medibank Private had been the subject of the greatest number of complaints in any quarter of its 20-year history.
Even though Medibank has less than one-third of the market, its policyholders accounted for 61 per cent of the 1683 complaints made to the Ombudsman between July and September, a 60 per cent jump in total complaints compared with the same quarter last year.
After the announcement of the Ombusdman's quarterly bulletin, Medibank's new chief customer officer David Koczkar said the company apologised for the "unacceptable" problems, for which some aggrieved customers were offered compensation.Â
"We're confident it won't happen again," he said. "We know we need to do better, and that's why we're investing in offering more value."
Industry communications director for Roy Morgan Research, Norman Morris, said that, although Medibank had the lowest customer satisfaction score of the largest 16 funds, it was not alone.
"It is cause for concern that the overall satisfaction trend for the industry has been declining since the middle of 2015 and is now back at 2013 levels ... but of course it's not a very popular sort of insurance."
Mr Morris said price remained the primary reason that people shopped around or changed providers, while "any increase in rates normally attracts negative attention from politicians and the media".
"In Medibank's case ... becoming a listed company may [have] resulted in conflicts of interest between shareholders and members. Then there were the problems caused by a new technology upgrade."
As another publicly listed provider, NIB is also likely to face some of the "shareholder-versus-customer issues," Mr Morris said.
"This research has shown that, in order to reduce the likelihood of their customers shopping around or changing funds, private health insurers need to pay more attention to increasing the proportion of their customers who are 'very satisfied'."Â
On average just over one-quarter of private health insurance customers consider themselves "very satisfied".
According to comparison site finder.com.au, cost, complication, lack of need and satisfaction with Medicare are among the top reasons Australians choose not to have private health insurance.
In a recent survey of more than 2000 Australians, the comparison site found 15 per cent of respondents were planning to cancel their health insurance, with nearly half of those due to cost.
Their research found women were most deterred by the cost of health insurance, with 36 per cent finding it too expensive, compared with 27 per cent of men.
However, when it came to generational concerns about cost, Generation Y was less concerned, with just 28 per cent finding health insurance too costly, compared with 33 per cent of Generation X and Baby Boomers.
"The rising cost of premiums pose a serious threat to health insurers as policyholders start to examine the public healthcare provided for free," said Bessie Hassan, money expert at finder.com.au.