Complaints by Australians unhappy with their private insurance policies have risen by 30 percent, according to a new report from the national consumer watchdog.
Australian consumers paid private health insurance premiums of around $23.1 billion in 2016-17, an increase of $1 billion from 2015-16. Premium increases have been greater than inflation and wage growth in recent years.
The Australian Competition and Consumer Commission’s (ACCC) annual report on private health insurance revealed that consumers, in response to higher premiums, are moving to lower-cost policies with greater exclusions, or a higher excess, or are ditching their cover completely.
The proportion of the population holding hospital or general insurance cover dropped 0.6 percent to 54.9 percent, while out-of-pocket expenses for general or extra treatment increased by two percent.
Complaints about policies have now risen for four consecutive years.
“Consumers rely on private health funds engaging with them honestly so they can avoid unexpected out-of-pocket costs and make informed decisions about the policies they choose,” ACCC Acting Chair Delia Rickard said.
“However, we’ve found it’s currently very difficult for consumers to properly compare and choose policies for their needs, meaning many are shocked when presented with expensive bills for medical services and products they thought they were covered for.”
Ms Rickard's call for more transparent and informative insurance policies was backed by Australian Private Hospitals Association CEO Mr Michael Roff.
“APHA has long campaigned on behalf of consumers for a simpler system of private health insurance. We know there is a great deal of confusion about health insurance policies.
“Too many Australians are paying for policies that don’t meet their needs, but don’t find out until they are in a health emergency,” Mr Roff said.
The ACCC's report, which covers the 2016-17 financial year, acknowledges the government's ongoing attempt to reform the private health insurance industry and make policies simpler and more affordable.
One change being implemented is that the standard information statement that private insurers have to provide consumers is being replaced with a “minimum data set”.
“The ACCC welcomes this significant reform and considers it crucial that the new minimum data set is effective in providing consumers with clearer information about their cover,” Ms Rickard said.