Concerns over growing private health cover exclusions

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For the first time, the majority of hospital treatment policies held by Australians now contain exclusions, according to the Australian Competition and Consumer Commission’s (ACCC) annual report into the private health insurance industry.

More than 57 per cent of policies held by Australians contain exclusions, up from about 44 per cent in the previous year.

“Many people may not be aware their policies may have exclusions and don’t realise they would not be covered at all for treatment as a private patient for those conditions,” ACCC deputy chair Delia Rickard said.

“We’ve been working with private health insurers about how they can better communicate such detrimental policy changes to consumers.

“Insurers need to make sure these changes are communicated clearly, prominently and in a timely manner, to avoid misleading consumers,” Ms Rickard said.

The report found that, while the rate of increase in average annual premiums has slowed over the past five years, average premiums have increased by more than inflation and wage growth over the year, while consumers continue to drop their private health insurance.

The ACCC’s annual report into the private health insurance industry identified a number of other key industry developments and trends in 2018-19, including:

  • In 2018-19, consumers paid over $24.5 billion in private health insurance premiums, an increase of more than $661 million or 2.8 per cent from 2017-18.
  • The amount of hospital benefits paid to consumers by health insurers was around $15.4 billion and the amount of extras treatment benefits paid was around $5.3 billion.
  • The number of hospital policies with an excess or co-payment continued to increase slightly from 84 per cent to 85 per cent.
  • 86.8 per cent of in-hospital treatments are delivered without requiring any gap payments from patients, a slight reduction from the 2017-18 figure of 87.8 per cent.
  • Complaints to the private health insurance ombudsman (PHIO) have decreased by more than 11 per cent since June 2018. Over the same period, contacts to the ACCC relating to private health insurance decreased by 17 per cent – the same percentage decrease as from 2016-17 to 2017-18.

The ACCC has also identified an emerging and potential risk of consumer harm from the collection and use of consumer data by health insurers and other businesses in the health sector.

“Several health insurers offer rewards schemes for their members, some of which include the use of tracking apps to record physical activity. Such information may in some cases be combined with other external data sources to profile consumers for targeted marketing,” Ms Rickard said.

“While Australian consumers can benefit from these programs, we are concerned that few consumers may be fully informed or fully understand the scope of data collected when they sign up for, or use, such services.”

The ACCC is undertaking current enforcement action in relation to alleged misleading and deceptive conduct regarding consumer data in the health sector. 

Have you reached a tipping point with your private health cover? Do you believe the annual prices rises are justified?

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Written by Ben

33 Comments

Total Comments: 33
  1. 0
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    Never had it, and I am supporting my health everyday so I should never need it. Prevention is better than cure any day. Its never too late to change your habits to support good health!

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      While that is true there is always the unexpected when the mishaps of the past, knee injuries are a good example, catch up later in life and a replacement may be necessary. Wear and tear does have a habit of needing treatment later in life.
      The analogy I use in car insurance in that you pay it despite being a good safe driver in case you need to call on it. If you don’t need to call on it you could say it was a waste of money but if you do need it then you are glad you paid for it.

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      While that is true there is always the unexpected when the mishaps of the past, knee injuries are a good example, catch up later in life and a replacement may be necessary. Wear and tear does have a habit of needing treatment later in life.
      The analogy I use in car insurance in that you pay it despite being a good safe driver in case you need to call on it. If you don’t need to call on it you could say it was a waste of money but if you do need it then you are glad you paid for it.

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      On the contrary Tanker if, in any year, we do not have to make a claim on any of ou insurance policies (health, car, house, contents, travel and particularly my life) I feel t is a wonderful year. Insurance premiums are not wasted money as long as they give us peace of mind as my wife and I negotiate our way through this life.

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      On the contrary Tanker if, in any year, we do not have to make a claim on any of ou insurance policies (health, car, house, contents, travel and particularly my life) I feel t is a wonderful year. Insurance premiums are not wasted money as long as they give us peace of mind as my wife and I negotiate our way through this life.

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      Major problem Ted, when something you don’t expect happens, and it does at times, then you better have a lot of dollars in your savings account, now this may not happen to you, and I hope it doesn’t, but many people have to have some kind of fall back eapecially when you get up to the older years, you just never know. And that is what the health insurance people act on, your fear of “maybe” “what if” ther premiums are now getting to where people are opting out for lack of money. Its a fact of life that insurers may need to take a look at , and also the government needs to look at medicine doctors specialist charging?

  2. 0
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    Once any organisation is privatised it becomes a rip off and gives them the right to charge what ever the market can bear.The big Australian sell off is far from finished and one must ask what happens when every thing is sold off, looks like a bleak future for Australia.

  3. 0
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    Increases are never welcome, but reasonable ones would be acceptable, not the current situation where the rates go up by much more than the CPI. Shouldn’t be allowed!!

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      Its not just the increase in premiums, but also the reduction of cover that is the issue.

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      Agree Lizzie & KSS. Sick of hearing about ‘average increase’. I have just been advised that my increase is 6.2%. If there is an average increase of 3.25%, by my old maths calculations, this must mean that some premiums have gone down. Would love to know which ones these are!

      And agree that cover is absolutely diving. About 8 years ago I needed dental procedure and got back around 80%. Needed the same procedure recently – got back 37%. I’ve now dropped extras. With so many pages of terms and conditions, exclusions and constant changes, I am sure it is all done to deliberately confuse customers. Another sneaky thing they do is constantly push procedures UP a level, so where you were once covered for a procedure in level C, you have to constantly check to make sure they haven’t pushed that procedure into level B, without you knowing it. So you may find you are not covered for something you thought your were.

      No wonder Health Insurance Company’s can find so much money to sponsor sports teams, etc – the money is not going to their own customers paying through the nose.

  4. 0
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    For the first time, the majority of hospital treatment policies held by Australians now contain exclusions, Nice headline, but what exclusions? can you list some?

  5. 0
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    No matter how well you look after your health nothing helps bone on bone hip and knee problems except surgery, my health fund covers these 2 items thank goodness.

  6. 0
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    I don’t have it can’t afford on pension. If I did not pay exorbitant rent then maybe different. The public system has been good since in Sept I was diagnosed with Primary Peritoneal and advanced ovarian and tubes 3c. Have had 4 chemo, massive operation and now more Chemo.

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      Well done, but it depends where you live, Joy Anne. In Cairns you have to be in Private Health, or wait for them to fly you somewhere else. Made our home there but shifted south because of medical concerns and yes, we stick to private health.

  7. 0
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    The new ‘you bewt’ Bronze, Silver Gold categories were meant to add transparency to private health cover. It didn’t!

    BFor example, if you are well over 50 and your child bearing years are well behind you, top cover (which you may want to cover you for say hip or knee replacement) now contains pregnancy, fertility, and associated services. You cannot now get a policy that excludes these but covers for those things you may actually want cover for.

    Insurance companies have already within the first year added to the complaxity by offerring Bronze Plus, Silver Plus etc which some advertise as being some where between Silver and Gold. Some offer a ‘platinum’ level whatever that is. Safe to say the re-engineering attempted by the Government in trying to curtail premium increases has not be the sucess they hoped for.

    KB asked what are some of the exclusions: well dental surgery required after say an incident that results in jaw surgery may not cover the associated dental costs, most mental health conditions are excluded or severley limited, even some cancer treatments are excluded as well as rectification surgery after cancer surgery e.g. breast reconstruction, some eye surgery, even some types of knee reconstructions are excluded. The problem is there is no way to compare what you are covered for unless you get the full policy statement and read every word of the small print.

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      I will have to check KSS but I understood that my fund, AHM, does not include pregnancy in my policy.

    • 0
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      Then you may not be on top cover Misty. But do check. Mine changed last year! And interestingly (though irrelevant for me) some policies cover fertility treatments but not the resulting pregnancy. Go figure!

  8. 0
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    On reading these comments it suddenly hit me. I hope for goodness sake the Govt does not let the Chinese take over the private health insurance companies as they have done with Alinta. Good help us all.

  9. 0
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    wouldn’t be without it, hubby had an op 8 yrs ago that brought on severe back pain, had a pain stimulator put in his back, $19000 just for the battery plus all the other stuff that goes with it, if he had not been in a fund it would never been offered to someone with no insurance, this was seven years ago and had several ops since at no cost. It has been so beneficial, glad it was there when we really needed it.

  10. 0
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    I have just been informed by AHM. that my health insurance payments are to be increased. Time to make a change.

    • 0
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      Floss if one increases the charges you can bet they all will, try some of the comparison sites like Finder.com, Compare the Market and Google Health Fund Comparisons to see who has the best deal for you.

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