You’d think that now’s the best time to get health insurance if you’re not already signed up for one.

But, in Australia, a weird trend is leaving many baffled: an increasing number of young people are ditching their private health insurance despite the fact a deadly virus is causing an unprecedented pandemic. Why on Earth is this happening?

According to information released by the Federal Government, more than 29,000 Australians canceled their private health insurance in just three months, since the pandemic started, from March to June.

Even well before the COVID-19 pandemic, Australians had been abandoning in large numbers their medical insurance. According to year to June numbers, 56,000 Australians aged 20 to 49 canceled their cover. Meanwhile, more older Australians have applied for private healthcare insurance. So essentially, a number of Australians is giving up on their health insurance, while another part of the population is opting for private healthcare.

This is creating systemic problems in the insurance sector, which is losing more and more of its young and healthy users while gaining older, more prone to disease, expensive users.

Why would someone cancel their insurance in the middle of a pandemic?

From the first days of lockdown, people became aware that the coronavirus mostly threatens older people, largely sparing the youth. What’s more, many elective surgeries and routine services like dental and eye appointments had to be canceled. As such, people didn’t have access to services that their insurance would cover. This turned out to be a pressing issue for many Australians, sometimes in unexpected ways.

Many young Australians simply feel that their insurance isn’t worth the money. According to ABC Australia, insurers paid about $3.3 billion in hospital benefits last quarter, which was about 12.9 percent less than the previous three months.

So, ironically, many Australians don’t see the point in investing in health insurance as much as they did in previous years — despite the woes that come with the territory of living during a pandemic.

For the industry, these developments don’t bode well, with net profit after tax falling by 45.3% in the year to June.

On October 7, the government announced funding for a review of policies deterring young people from taking out private cover, a measure that has been welcomed by health insurers. The government set aside $2.4 million for a review into the community rating system, part of a wider $20 million packed meant to help struggling private health insurers.

Meanwhile, some of Australia’s biggest private health insurance funds are set to begin charging higher premiums. Customers are expected to pay as much as 3.27 percent more for their premiums from October 1.

Community rating is the principle that all policyholders should pay the same premiums regardless of risk. It means, essentially, that low-risk young members subsidize higher-risk older members. Private Healthcare Australia estimates this cross-subsidization is costing younger members $900 a year.

However, this system is pricing out younger people out of the sector. In an explanatory memorandum in early October, the Department of Health said the planned review would “highlight whether any changes to these policy settings could improve value and effectiveness for consumers”.