Poor health insurance practices leading to bill shock, reduced access to health care – ACCC


Concerns about the complexity of private health insurance have been raised by the Australian Competition and Consumer Commission (ACCC) in their annual industry report.

The Private Health Insurance Report 2014-15 shows Australians are consistently ill informed about changes to their policies and continue to struggle to understand the terminology and entitlements, or lack of entitlements, in their health insurance.

ACCC Deputy Chair Delia Rickard said insurers must give consumers clear advance warning when they cut the level of cover or benefits through their policy. She said there were repeated examples among insurers of poor practices leading to bill shock, inadequate cover and reduced access to health care.

“With over 13 million people in Australia holding some form of private health insurance, the ACCC’s report reveals the challenges in finding out about, understanding and responding to insurer initiated changes to coverage and benefits.

“If consumers are not given clear notice of changes to their insurance, unexpected out of pocket expenses and limits on their access to medical treatment can cause great harm and detriment. The ACCC’s research found vulnerable consumers, particularly younger and non-English speaking people, the elderly, those with chronic illnesses and those undergoing continuing treatment can be at greater risk of experiencing these impacts,” she said.

Australian Private Hospitals Association (APHA) CEO Mr Michael Roff said the association has long been an advocate for patients on these issues and continued to argue for simplification of language and policies.

“There is a clear disconnect between what Australians think they are purchasing with private health insurance and what they end up with. Policies need to be in plain English, with all excluded benefits clearly articulated and a process set up where policy holders are regularly updated about any and all changes to their policy.

“This is a timely report from the ACCC as the Private Health Ministerial Advisory Committee begins its work. This committee is tasked with reforming private health to benefit Australians and there are a number of issues, not least of all those raised by the ACCC that need to be part of the discussion.

“It often falls to private hospitals to tell patients that they are not covered for certain procedures. This occurs when patients are vulnerable and in need of our care and could easily be avoided if private health insurance policies were developed with the principal focus on patient needs, not shareholder needs,” he said.

The ACCC report was closely followed by a quarterly update from the Private Health Insurance Ombudsman (PHIO) that received a record number of complaints against insurers from July to September – a 60% increase on the same period in 2015.

Medibank accounted for almost 61% of health insurer complaints and 43% of disputes, this is well above the number expected for its 28.6% market share. The PHIO attributed much of the increase to service and administration complaints related to the insurance company’s computer system glitches.


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