Has your insurer misled you?

The ACCC has delivered a scathing review of the private health insurance industry.

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?





    COMMENTS

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    MICK
    22nd Oct 2015
    10:06am
    I have avoided private health insurance for decades as I understand that this industry is a scam and holders of policies are at best on thin ice. Whilst this is a gamble I'll take my chances in the knowledge that I cannot live forever and that God will determine when I go, not an insurance company trying to maximise its profits.
    leonYLC
    22nd Oct 2015
    12:34pm
    Mick, I'd love to work out how much I have spent on private health insurance in my lifetime, then work out if I'd be better off without having spent that money. Then again, the minute I drop the cover I'll probably drop on my head and need to go to hospital. You can't win either way it would seem...
    MICK
    22nd Oct 2015
    2:20pm
    Yeah, life's a lottery Leon. We all roll the dice. In making a choice I guess you have to look at your parents and their parents and see if the genetics are with you as a starter.
    A story for you to consider: My wife 2 years ago found out that she had a gall bladder which was about to explode. She went to the local surgeon who wanted to put her into his private hospital...even though he also worked in the (large) local public hospital. It was strictly business as this guy figured that people travelling overseas in 2 months could afford it.
    We had only 2 options. The first was to accept the cost of going through his private hospital. Expensive. The second was to find a surgeon who would do the procedure through the public system. After half a day on the phone I found a surgeon who was happy to operate at his public hospital. On going for the consultation, complete with ultrasound and assessments, this surgeon picked up the phone, rang the hospital, rescheduled a couple of people who were just having by the way exploratories and put my wife in to be operated on 2 days later. We were astounded...although we felt a bit guilty about the 2 people who were rescheduled.
    The point of the above narrative is to demonstrate how the public system should work, that there are still (some) doctors out there whose interest is medicine rather than greed and that private cover, whilst good, is not the panacea which it is made out to be. In the end we have to choose and hope that we have made the correct choice.
    leonYLC
    22nd Oct 2015
    2:40pm
    Good to hear your wife got through okay mick. It's also nice to see that the public system works too. And you're right about doctors as well. Too many worried more about their own pockets and not enough about the patient. The hippocratic oath got twisted somewhere along the line with quite a few docs it would seem.
    disillusioned
    22nd Oct 2015
    11:49am
    Private Health Insurance is a con with increasing premiums, poor rebates, unclear as to what is covered. Plus the fact that the BIG insurer has determined not to cover people who attend certain private hospitals. They can change your policy without having to let you know. Its highway robbery and the government needs to have a good hard look at the operation of some of those insurers else more people will opt out of private insurance totally and further impact on the resources of public health.
    leonYLC
    22nd Oct 2015
    12:33pm
    I must admit, your nickname aptly describes my own, and perhaps many Australian's, experience with private health insurance. My cover seems to cost each more every year and provides less for the extra money spent. If only they were as thorough in telling me what I am covered for as they are with informing me of my policy premium increases.
    Old Fella
    22nd Oct 2015
    12:06pm
    Congratulations ACCC, you have highlighted formally what many people with health insurance have suspected for some time. I hope you (ACCC) can focus on the other half of health equation now; and that is the costs charged by actual health providers - Specialists, Private Hospitals et all. Maximum financial gouging seems to be the common virus infecting many if not all our ' Hippocratic' health services industry and it needs urgent attention.
    MICK
    22nd Oct 2015
    2:22pm
    Don't hold your breath Old Fella. Organisations like the ACCC and ASIC have been shown over a long period of time to be little more than pencil pushing bureaucrats who write back but FAIL TO ACT other than the once a year action which then gets media attention and covers up the huge number of complaints which are simply fobbed off.
    Tom Tank
    22nd Oct 2015
    12:49pm
    Medibank Private, after privatisation, changed their coverage without proper notification and have caught many people, me included, with additional unexpected charges. This probably explains their multi-million dollar profit this year.
    They used to exist to serve the community and their mere existence helped keep a check on the Health Insurance Industry. Now it is open slather and the consumer carries the cost.
    Thank you LNP for once again confirming that privatisation does not work in the consumers best interests.
    MICK
    22nd Oct 2015
    2:24pm
    And this is the tragedy of government run organisations set up to service community which are then turned into cash cows for investors. It is wrong but people do not care enough to stop it so the game goes on.
    MaryR
    22nd Oct 2015
    5:37pm
    My partner complained about paying his health insurance since he was 16 and had never really used it. Then he was diagnosed with Bladder cancer in Dec 2010. He was 63. Since then he has had a knee reconstruction in 2012, a back operation in 2014, a large melanoma removed from his shoulder in January 2015 and then in March 2015 an emergency triple heart bypass. All done in private hospitals with his own surgeons etc. He is out of pocket by less than $10,000. He isn't complaining about paying it anymore. I believe it is too big a gamble not to have it nowadays.
    MICK
    22nd Oct 2015
    5:44pm
    Sounds like your partner won the North Korean lottery Mary. Poor bugger. Just as well he had health insurance. I would say that this story is certainly more than 3 standard deviations from the mean.
    Hope he pulls through.
    older&wiser
    22nd Oct 2015
    6:04pm
    Private health insurance is nothing more than blackmail. Premiums go up and up and cover goes down and down... I spend hours researching deals, and there really is no health insurance that caters to an individuals requirements. Some funds don't cover hip/knee replacement if you put your age as over 60. Get sick and tired of quotes that include weight loss surgery, and obstetric surgery. Premiums continue to rise, but coverage continues to dive.
    MICK
    22nd Oct 2015
    8:34pm
    No such thing as CPI increases with the health industry. Rates go up way over every year.
    Missskinnylegs
    22nd Oct 2015
    6:09pm
    I'd like to know why - when I've been with same fund for over 30 years, have only changed my plan a few times but now have to wait 12 months for a pre-existing condition. Major rip-off - becoming more like USA health system every day - Medibank Private - what a joke! Hopefully my surgeon can do the op for me in public as a private patient and I believe he is a no gap surgeon too!
    MICK
    22nd Oct 2015
    8:38pm
    If you have a decent doctor he will not use the private system. Those that insist on that have a vested interest.
    My wife went through a similar experience and I found her another (decent) surgeon...who performed the procedure 2 days later. We always remember this man with fondness.
    niemakawa
    23rd Oct 2015
    3:58am
    It seems you may have changed your plan recently.
    niemakawa
    23rd Oct 2015
    3:56am
    The ACCC will do nothing.
    niemakawa
    23rd Oct 2015
    4:03am
    Medical and Hospital treatment should be paid through medicare,for all age pensioners regardless of their financial circumstances, with maybe a few exceptions such as politicians current or retired.
    buby
    23rd Oct 2015
    6:23pm
    yes i agree with that Neimakawa, can we vote for you now :) lol
    SteveB
    29th Oct 2015
    11:13am
    Mick.....who do you call to find a surgeon, do call your local hospital or do you 'Google' hip surgeons for instance?


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