Bupa calls for comparator site transparency
Dr Dwayne Crombie, Managing Director of Bupa Health Insurance, discusses why comparator websites should be more transparent about their commissions and the impact that has on premiums.
Late last year Bupa addressed a Senate Inquiry Committee on affordability and there were a number of issues that came up regarding transparency for customers, including comparator online websites.
Comparators claim as much as 40 per cent of the first year’s premium as their commission for informing people of their choice. This fee doesn't go to buying health services for anyone, and leads to higher premiums in the long run.
Dr Dwayne Crombie, Managing Director of Bupa Health Insurance, says that customers using comparator sites should know what financial incentives the site receives for recommending different products. He believes customers should also be informed when only a small number of products are included in the comparison.
“I think the big thing for us is that they don’t tell you what they charge, they don’t tell you how many polices they’re comparing, and they don’t have a clear obligation to tell you why they made the recommendation they did," he said.
“Each of the comparators have slightly different commission rates but we know that usually it's somewhere between 27 to 35 per cent of the first year's premium.
“Across the board for health insurers, approximately 86 cents in every dollar received in premiums is paid back in claims. That means if 30 per cent of a premium is paid to a comparator site, you can see why prices would have to go up in the long run as the cost exceeds revenue.
All we’re asking for is transparency for the customer. We accept that comparators can exist, but if they’re going to charge a lot of money, they should be really honest and upfront with customers.
“Our best guess is that up to $200 million a year is going out to pay for the cost of comparators. Obviously health insurance can be expensive, we’d like most of that money to pay for your actual health care, not to pay for someone to give you advice that you can get from the government website, or by coming to talk to any of the health funds.
“We know as well that we, as insurers, have work to do to make our products easier to understand, for example, to use common language across our offers. This is not all to blame on the comparator sites – every part of the health system has a part to play in helping reduce costs and improve affordability or value for money.”
The Australian Government has it's own online comparator website that doesn’t charge commission to compare health insurance covers.
“If the comparator sites were clear about fees, how they make choices, and what they’re covering, it would all help the consumer to have better information to make choices," Dr Crombie said.
Read more on the Sydney Morning Herald: Comparison websites push up premiums.