Has your insurer misled you?

The ACCC has called out private health insurance companies for misleading consumers and potentially breaching policyholders’ contracts – and the law.

Almost 50 per cent of Australians have a private health policy, with around 37 per cent unaware of what it covers. 

In its detailed review of the $21.1 billion industry Information and informed decision-making in private health insurance, the ACCC focused on the way health insurers present policy information to the customer, and how it affects consumer behaviour.

It found that the way that insurers present policy information both confuses and overwhelms the customer and reduces their ability to make informed choices.

The ACCC report also exposed many other failures across the industry, including a lack of sufficient information prior to purchasing a policy, with inconsistent information and ambiguous terminology that makes it difficult to understand just how much a consumer is covered.

Terms associated with such claims as “no gap” and “100 per cent cover” mislead consumers into thinking they could be getting more cover than they actually receive.

According to the report, this disconnect leads to complacency which, in turn, leads to a lack of competition within the industry – competition that would otherwise lead to lower prices, better quality products, greater innovation and increased efficiency of services.

Many private health insurance contracts also allow for the insurer to change a policy’s conditions without consulting the consumer. So even those who spend considerable time trying to understand their cover can be caught out by “false, misleading or deceptive conduct”.

This can make it even more difficult – even for astute consumers – to assess the true cost and cover of health insurance policies and could also mean insurers are in breach of contract – and the law.

Private Healthcare Australia has hit back at the consumer watchdog, claiming that the ACCC’s allegations “smear the industry with unsubstantiated allegations”.

But, according to ACCC deputy chair Delia Rickard, “It is in the interests of both consumers and industry to be as clear and transparent as possible so that consumers who are purchasing insurance can make the best decisions about their level of coverage.”

Consumers can compare health insurance policies on the government-run privatehealth.gov.au, as well as independent comparison website finder.com.au.

Read the ACCC report

Read more at The Sydney Morning Herald.

Do you know the extent of your health insurance coverage? Did you find it difficult to compare the costs and benefits of different health insurance providers? Have you had trouble understanding the conditions of your policy? What suggestions do you have to help make this whole process simpler and more transparent?

Written by Leon Della Bosca

Publisher of YourLifeChoices – Australia's most-trusted and longest-running retirement website. A trusted voice on Australia's retirement landscape, including retirement income and planning, government entitlements, lifestyle and news and information relevant to Australians over 50. Leon has worked in publishing for more than 25 years and is also a travel writer and editor, graphic designer and photographer.

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