ACCC takes Medibank to court for alleged misrepresentations

The ACCC has instituted proceedings in the Federal Court against Medibank Private.

Private health insurer in hot water

The Australian Consumer and Competition Commission (ACCC) has instituted proceedings in the Federal Court against Medibank Private Limited trading as ‘ahm Health Insurance’ (Medibank), alleging that Medibank made false representations about benefits covered by its health insurance policies, in breach of the Australian Consumer Law.

The ACCC alleges that Medibank falsely represented to members holding ahm ‘lite’ or ‘boost’ policies, who were making claims or inquiries, that they were not entitled to cover for joint investigations or reconstruction procedures, when in fact their policies covered these procedures.

ahm is Medibank Private’s low-cost brand, which currently has over 900,000 members across health, life, travel and pet insurance. In the relevant period, the ‘lite’ and ‘boost’ policies had around 130,000 members.

“We will allege that Medibank incorrectly rejected claims or eligibility inquiries from over 800 members for benefits that they were entitled to and were paying for,” ACCC chair Rod Sims said.

“As part of our case, we estimate about 60 members needlessly upgraded their policies, so they could access the joint investigation and reconstruction procedures they were already entitled to under their existing, cheaper insurance policies.

“In some cases, it is alleged that members who upgraded their policies were also required to serve a further waiting period to access these procedures,” Mr Sims said.

“Medibank’s alleged misrepresentations had serious consequences for members requiring procedures including spinal surgery, pelvic surgery, hip surgery and knee reconstructions, which often cost thousands of dollars.

“Some members were forced to delay surgery due to high out-of-pocket costs for these procedures and to seek alternative remedies to manage pain, when they were in fact entitled to insurance cover,” he said.

The ACCC’s proceedings against Medibank involve alleged misrepresentations in relation to ahm ‘lite’ policies from February 2013 to July 2018, and ahm ‘boost’ polices from February 2017 to July 2018.

Medibank self-reported this conduct to the ACCC and has begun compensating affected members. ahm members who believe they have been denied a benefit should contact ahm directly or complete a compensation form on the ahm website.

The ACCC also alleges that Medibank breached the Australian Consumer Law by failing to supply insurance cover for joint investigations and reconstructions, despite accepting payment from members for that cover.

The ACCC is seeking penalties, consumer redress, declarations, injunctions, publication orders, the implementation of a compliance program and costs.

Do you have private health insurance? Are you insured through ahm or Medibank Private? Do you fully understand what things your health policy covers or do you trust your insurer?

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    COMMENTS

    To make a comment, please register or login
    Paddington
    4th Sep 2019
    10:02am
    This one is too expensive for us anyway. We are with a small one, Mildura Health Fund, and so far, so good!
    older&wiser
    4th Sep 2019
    1:28pm
    I'm also with them - their rates and cover is better. I spent considerable time setting up a spreadsheet to get quotes from many Insurers, and nearly all of the major funds are far much more expensive. Mildura was far the best.
    Rosret
    4th Sep 2019
    10:54am
    So they should. I remember when Medibank first went private. I had an early morning dental appointment before 10.00 a.m. When I swiped the card it said I had no cover whatsoever.

    I went home and rang Medibank and the excuse they gave was it was because I paid monthly not annually - however payment was remunerated.

    A few weeks later I returned to the dentist for a follow up treatment this time at 10.00 a.m. The lady before me had just tried to pay her bill and low and behold it was reject.
    "Medibank" I asked? She nodded and I explained their rationale.

    I did wonder at that time - how many people across Australia had their claims denied and just accepted they had reached their payout limit.
    Horace Cope
    4th Sep 2019
    11:12am
    I'm old enough to recall when health funds paid out for doctors' visits and hospital stays, no gym membership, joggers, sporting equipment or any other lifestyle items that some marketing guru has dreamt up. No wonder premiums have risen exponentially.
    TREBOR
    4th Sep 2019
    12:36pm
    Ah yes, Phase II of the old privatisation nightmare, eh? First we buy up a government utility at a basement bargain price, then we proceed to run it down and invite Gordon Gecko in, while in the meantime fleecing our customers with pie-in-the-sky promises!!

    Good snooping, Ninety-Nine!
    floss
    4th Sep 2019
    2:00pm
    AHM started as a member only fund owned and run by the members then privatised by our stupid Government and now look at the mess.Is Australian now the biggest rip off country in the world, must be close.
    floss
    4th Sep 2019
    2:06pm
    After being one of AHMs longest members I am now in the process of transferring to another fund.

    4th Sep 2019
    4:12pm
    Private health insurance has to be one of the greatest scams of the last century.
    musicveg
    4th Sep 2019
    6:45pm
    There is plenty more where that scam came from, we are being ripped off all the time, that is how the rich elite keep getting richer.
    Tanker
    8th Sep 2019
    11:57am
    Privatisation has been a disaster for all us ordinary people. Our costs have gone while service has gone down and it has all been done for ideological reasons. The privatisation of Medibank, and the CBA, took government control out of the private health costs, and kept banking within bounds, by means of an honest competitor in the those industries.
    Private health insurance would not exist without the massive government subsidy the funds receive. So much for destroying the car industry because of a refusal to provide a subsidy on the basis that if it was not viable without government support it should not continue in business.
    It is about time for a Royal Commission into the Heath Insurance Industry. Pigs might fly.
    Tanker
    8th Sep 2019
    11:57am
    Privatisation has been a disaster for all us ordinary people. Our costs have gone while service has gone down and it has all been done for ideological reasons. The privatisation of Medibank, and the CBA, took government control out of the private health costs, and kept banking within bounds, by means of an honest competitor in the those industries.
    Private health insurance would not exist without the massive government subsidy the funds receive. So much for destroying the car industry because of a refusal to provide a subsidy on the basis that if it was not viable without government support it should not continue in business.
    It is about time for a Royal Commission into the Heath Insurance Industry. Pigs might fly.


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