Concerns over growing private health cover exclusions

The majority of hospital treatment policies held by Australians now contain exclusions.

Alarm over health fund exclusions

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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    COMMENTS

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    Ted Wards
    3rd Mar 2020
    10:52am
    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!
    Tanker
    3rd Mar 2020
    11:13am
    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.
    Tanker
    3rd Mar 2020
    11:13am
    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.
    Eddy
    3rd Mar 2020
    1:01pm
    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.
    Eddy
    3rd Mar 2020
    1:01pm
    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.
    john
    3rd Mar 2020
    1:16pm
    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?
    floss
    3rd Mar 2020
    11:30am
    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.
    Lizzie
    3rd Mar 2020
    11:32am
    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!!
    KSS
    3rd Mar 2020
    1:42pm
    Its not just the increase in premiums, but also the reduction of cover that is the issue.
    older&wiser
    3rd Mar 2020
    8:06pm
    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.
    80 plus
    3rd Mar 2020
    11:44am
    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?
    Misty
    3rd Mar 2020
    12:04pm
    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.
    KB
    3rd Mar 2020
    12:37pm
    I agree with you Misty. What are the exclusions not outlined in the article?
    KB
    3rd Mar 2020
    12:37pm
    I agree with you Misty. What are the exclusions not outlined in the article?
    Joy Anne
    3rd Mar 2020
    12:49pm
    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.
    Mariner
    3rd Mar 2020
    3:58pm
    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.
    KSS
    3rd Mar 2020
    1:53pm
    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.
    Misty
    3rd Mar 2020
    7:25pm
    I will have to check KSS but I understood that my fund, AHM, does not include pregnancy in my policy.
    KSS
    4th Mar 2020
    7:55am
    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!
    Jingles
    3rd Mar 2020
    2:32pm
    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.
    trickyv
    3rd Mar 2020
    4:01pm
    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.
    Oldchick
    4th Mar 2020
    2:15pm
    A friend of mine has just had one put in too. Thankfully had private cover or likewise, it wouldn’t have been given as an option
    floss
    3rd Mar 2020
    5:30pm
    I have just been informed by AHM. that my health insurance payments are to be increased. Time to make a change.
    Misty
    4th Mar 2020
    10:19am
    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.
    Pardelope
    3rd Mar 2020
    6:49pm
    Having had rectal cancer back in 2000 - 2001, the biggest benefit I saw from having private cover (Medibank) was that I did not have to wait to see and oncologist or surgeon or radiation oncologist. Being on a waiting list can adversely affect your final outcome. On one day along the way, the cancer starts to spread, and that is not a good thing. I was still quite a bit out of pocket, but possibly would not have survived if I had waited to go through the public system. The public system is good - once you are accepted into it, and the waiting periods can be vastly different according to your location and problem. If going private, make sure you talk to the specialists about what out of pocket expenses you will have - including anaesthetics, rehab, after care dressings etc etc. Ask them if they will reduce their fees and costs (squeaky axle gets the grease). Be aware that as a private patient, you may have the same specialist in the same hospital - but the public patient will pay nothing and you will possibly pay a lot of out of pocket fees and expenses. Also, you are not obliged to use your private cover.
    Justsane
    4th Mar 2020
    1:56pm
    Pardelope - I think you would find that the waiting periods in the public system apply only to elective surgery. Cancer treatment/surgery is not elective.
    Pardelope
    6th Mar 2020
    11:04am
    Unfortunately, when I was first diagnosed, there was a delay for initial appointments through the public system because I was not judged to be an urgent case. I was told that if I had been considered stage 4 they would have been able to speed things up. Hopefully, that situation is not as common now. Going private meant that I got appointments within the first ten days, and commenced treatment immediatly after that. it is important to check what is available in your area - and with different specialists.
    Jack
    3rd Mar 2020
    7:10pm
    Floss I think you will find every health fund will increase. I did a lot of research 2 years ago and changed funds. I now have 2 policies (1 for hospital and 1 for extras). I increased my excess and pay the current price before end of March (for the whole year and some funds allow you pay in advance up to 18 months). I put funds aside each fortnight to cover next year's premium. Time to research for this year. Some funds will give you a incentive if you change funds. I also use not for profit funds. HCF Hospital offered a 5% discount as we were in RAA and my father was in the Armed Forces so shifted to Defence Health Extra which pays a higher rebate than my previous funds without an increase in premium
    Karen
    3rd Mar 2020
    10:37pm
    Just chatting with an old school friend today, and he has to go in for heart stents - he said there was even a charge for 'prosthetics' - for the stents themselves. He's been on private health for years and is not happy that he has to go to the major public hospital, too, instad of a nice private one.

    He almost cried when I told him that I was not only air-lifted, but got first class treatment and next to no waiting... with a top national ANU surgeon....
    Misty
    4th Mar 2020
    10:20am
    Who are you with Karen, a health fund or public?.
    Oldchick
    4th Mar 2020
    2:23pm
    My partner has private health, has had a total of 7 stents with no out of pocket expense other than the one off per year excess. He had 5 then another 2 a fortnight later. Four years on from that he had quadruple bypass surgery, same deal, no out of pocket expense and top surgeons all the way.
    Justsane
    4th Mar 2020
    1:45pm
    We have private health ancillaries. Can hardly ever use them. Such a waste of money - am thinking about dropping the cover. I would much rather put the $106 per month into Medicare, but as pensioners we do not need to pay the Medicare levy. Talk about private health taking pressure off the public system - it's just ridiculous!
    4b2
    8th Mar 2020
    1:04pm
    It's about value for money. In the beginning we signed up for health insurance without any extras or options. We knew what the returns would be for hospital care and operations.
    Now it's all so confusing with the Health Insurers trying to run an investment scheme not a health insurance scheme. I don't blame people opting out. No value for their money spent.


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