With major changes to Australia's health cover policies looming, many are shopping around for the best insurance deal. Online comparison services promise to clear the confusion and side-step the crowd, but do they get a clean bill of health?
The Federal Government's Lifetime Health Cover scheme, which penalises over-30s each year they postpone private cover, begins on July 1. Ahead of this deadline consumers face a minefield of 45 registered health funds and over 1000 health insurance products to choose from.
Health funds themselves are swamped with enquiries, and hampered by with insufficient manpower to deal with them. Phone lines are crammed with callers, retail offices have queues to the door on a daily basis and printed brochures and application forms are in short supply.
MBF, for example, usually produces and distributes 300,000 product brochures every six months. In June alone the health insurance provider has distributed 350,000.
MBF's General Manager of Public Affairs, David Jones told ZDNet Australia that this proves the "intensity of the Lifetime Health Cover campaign -- we're effectively packing six months distribution into one month".
Consequently, people are turning to the Internet in their search for advice. Unfortunately, wading through a number of Web sites can be just as disheartening as waiting in a queue for over half an hour. This is where health fund infomediaries come into the picture.
Touted as unbiased and independent online advisory services, infomediaries ask a few questions relating to a user's health insurance needs and then short-list a range of best-fit policies for comparison. Consumers can apply online and the service will contact the funds on their behalf.
Ozecover, the first site of this kind in Australia, was launched late last month. The directors of the company have taken an old-school approach to the service, reviewing each application manually. They told ZDNet Australia they and staff have stayed up until 4am processing applications.
The site had 1000 applications in its first week. "We haven't had time to stop and count," said Director Peter Carroll. "Over half the people hitting the site are filling in an application form," Carroll confirmed.
Carroll explained to ZDNet Australia that Ozecover works on a "handshake agreement" and 5 percent commission basis with some of the funds on the market. "Others funds are cagey at the minute. They are not used to using infomediaries and are struggling with e-commerce issues -- some are a bit scared of it," Carroll said.
Carroll is confident of establishing agreements with the majority of sites and explained that research has shown that the demographics of people coming through the Ozecover site are young males. "Normally, purchasers of health insurance are women," explained Carroll. "Health insurers struggle to get young men in -- yet, we're attracting that market."
Carroll said he was not worried about customers bypassing Ozecover and approaching a heath fund independently once they had been notified of suitable cover. He said Ozecover would "iron out the bugs" which may mean a AU$10 gift to the consumer for going through the site or a special deal from the participating fund.
Carroll is confident of a successful future for Ozecover, pointing to the quarter of a million Australians who will be having 30th birthdays each year. "After July 1 there will be six million people with insurance and not even sure if they've got the right one," Carroll added.
The second Internet service of this kind in Australia, iSelect, had 50 people on the site within minutes of going live, according to its operators. Unlike Ozecover, the iSelect team favour a computer generated response which provides immediate information for users as opposed to Ozecover's two-day turnaround.
"It was definitely the case of people feeling pressure and using us as a means to cut through confusion and a plethora of products available on the market," iSelect's Director of Strategy and Development David Urpani said.
iSelect acts as an agency on behalf of insurance providers and, like its counterpart Ozecover, will pass customers on to the best provider for their needs, even those it has not signed. iSelect hopes this will convince the industry infomediary services can deliver.
However, reactions from the health funds themselves have been mixed.
Grand United has partnerships in place with infomediaries and General Manager Phillip Berner told ZDNet Australia he sees it as a "positive development for the industry". Berner said that given the increasing popularity of the Internet, not partnering with the services would be "doing potential customers a disservice".
On the other hand, MBF's Jones believes it is still early days for comparison services and said he would be more relaxed if he could be convinced the services were providing independent information.
"They're under pressure from a credibility factor to ensure they are independent and provide accurate information," Jones stressed. "It is early days to tell whether or not they are living up to their expectations."
As yet there is no industry regulator for informediaries.
Jones confirmed that MBF has had customer leads coming from such services but stressed "we are not paying a commission as we haven't struck up a relationship with any of those sites".
The sites, as they claim themselves, have simply promoted their service to MBF as an "attractive option for the future," Jones said.
"The jury is still out on whether online brokerage services be of value or succeed. There is no substitute for consumers shopping around and getting information direct from the source," he said.
