Health insurance changes leave many surprised with lack of cover

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As a paramedic, Natalie Glaser has a highly stressful job, with long hours and shift work.

She went to her GP, complaining of an upset stomach.

“I was really scared as well, and I still am scared,” she told the ABC’s PM.

But when the doctor advised her to get a colonoscopy straight away, her anxiety grew further.

“My GP asked me if I’d like to go to the private hospital system or the public, and I took out my HCF cover because I said I’m sure I’m covered for this procedure,” she recalled.

“When I pulled it out and it said I wasn’t covered for it, I was quite confused.”

Ms Glaser said she lost the majority of her coverage when HCF reviewed her policy and moved her down to a lower-cost, more basic level of coverage.

“I lost 18 out of 25 procedures — that’s about 72 per cent of my cover I lost.”

HCF informed Natalie Glaser via email in April 2019 her policy was changing from bronze level to basic, but she did not read it at the time, assuming it was a marketing message.

“You know, HCF themselves send hundreds of marketing emails a year, [and] I don’t tend to check all of them,” Ms Glaser said.

“And it’s not just HCF, it’s all companies send heaps of marketing every year.”

HCF has responded by saying that, when it has to make changes, it goes above the notification requirements of the Private Health Insurance legislation.

Where it is a significant change to hospital benefits, it told PM, HCF will provide 60 or more days’ notice.

It added that when it notifies members of any changes to their coverage or premiums, it does so according to the member’s preferred communication method, which is most commonly by mail or email.

Many people unsure about cover changes
But there is evidence Ms Glaser is far from the only one confused by changes to her private health cover.

Insurance comparison website iSelect told PM it saw a surge in call volumes following the policy transfer process in April 2019, then again after the grace period ended this year.

“Certainly throughout September we’ve seen a big increase in the number of people contacting us to discuss how their policy has changed in terms of price or what they’re covered for,” iSelect spokesperson Laura Crowden told the ABC.

“And sometimes, from time to time, we do see a little bit of a spike based on one insurer making some changes to their policy at a particular time and they can happen out of the blue.”

Private Healthcare Australia represents the insurers, which have more than 13 million members.

CEO Rachel David said, as far as she was aware, missing emails were not a common problem.

“We haven’t seen an uptick in this sort of complaint, but people need to be pretty vigilant,” she told PM.

“That if they do get one of those emails, they need to check it thoroughly and ensure they understand the implications.”

Stephen Duckett, the director of the Grattan Institute’s health program, said private health funds have had the mammoth task of reviewing all of their members’ coverage to see where they fit into the new basic, bronze, silver or gold categories.

He told PM that while HCF has done nothing wrong, private health insurers should do all they can to make their coverage change email eye-catching, to prevent people like Natalie from being left without cover they thought they had.

“The notification from funds should be in big, bold letters [saying], ‘What we’re shifting you to is a package which only covers this: boom boom boom.’

“I think this is one of the issues. There is a private health insurance ombudsman who can take it up and say, ‘Well, is this a fair deal?'”

Ms Glaser took her concerns to both HCF and the ombudsman, but was told there was no legal avenue to pursue.

She is now trying to work out how she is going to afford a colonoscopy, and wants to warn others to avoid the pain she is experiencing.

“Because it was a real shock to me,” she explained.

“Once you realise, and then you’ve got to change back, there’s a 12-month waiting period to get back all the previous things you were covered for.”

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Total Comments: 8
  1. 0

    I appreciate that Ms Glaser had quite a shock when she realised that she was no longer covered for a particular procedure by her health fund. However, they did notify her, using her preferred method of communication, and she chose not to read the notification. Yes, it’s a pain getting all that marketing and spam, but we need to wade through it to protect ourselves.

    • 0

      I agree Poppa Bear. This is a customer error which she is now seeing the consequences of. I would say that in the last year (maybe two) there has been so much in the media about checking your cover and especially since the new categories came in. Her provider did everything they were meant to and she ignored it. Onus is on her!

  2. 0

    These profit insurers are ripping people off. Don’t care what her preferred method of notification is they should not be doing these changes to basic, silver, gold. That is a stupid idea. People paying huge amounts for nothing. WHY can’t the Insurers have only 1 tier like they use to years ago. I have the best Police Health 1 tier and covers everything with 80% back on extras. Absolutely fantastic.

  3. 0

    I have had similar and as for other comment here saying “should have read the fine print” – really? When the levels changed a few years ago, my fund did the same to me. I had always had top level extras as I have partial dentures. After I needed a recent repair to my denture, was told sorry, no refund, as this was classed as major orthodontics. Like Miss Glasser, my appeal got nowhere. Funny enough, reading all the pages of accompaying paperwork, it clearly stated “your level of cover will not be affected”. But it was. Apparently, they meant this was AFTER the change. My crystal ball was supposed to tell me this was for after changes, not before.
    As for mentioning I-Select, they have recently been heavily fined for false and misleading promotions.

  4. 0

    Look out too if you are approaching 70! I have read of several cases where people we’re relying on their life insurance policy money for their funeral costs. However, their life insurance finishes at 70 unless they formally negotiate and sign for a new policy.
    Apparently people should be grateful they actually made it to their 70th birthday – up until then the policy covered them during their working life so their family would receive funds in the event of their death. After that well- too bad -if they didn’t receive the notification, or didn’t read it they are no longer covered. It should be renamed ‘An Insurance Until You’re 70 Policy’. Is this a case for misrepresentation or false advertising – calling it a Life Insurance Policy?

  5. 0

    …my previous comment should read ….were relying on their life insurance….

    • 0

      Know quite a few people who have been left without insurance once they reach 70 – even with funds they have been in for over 40 years. Funeral funds are the worst as you have paid tens of thousands of dollars for something they won’t pay for once you reach 70.
      We bought pre-paid funerals where the money is invested until needed. We picked out everything we wanted and paid it off monthly.
      Our family now doesn’t have to worry about having to fork out thousands, or even deciding what ‘mum’ dad’ would prefer as it has already been done. 🙂

  6. 0

    Hi Jaycee, your plans sound good. Funny how insurance companies often have different meanings for the same words such as life and funeral- you would only need to have a funeral when you are dead at any age!
    I didn’t know about some funeral plans ending at age 70 too- thanks for that, I will pass that around.



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