ACCC issues fresh warning to health insurance firms over failures

The ACCC has warned health insurance groups about not properly notifying customers of changes to their coverage.

ACCC deputy commissioner Delia Rickard.

Australian insurance groups have been put on notice by the consumer watchdog for not properly notifying customers of reductions in their coverage.

In its annual report into the private health insurance sector, the Australian Competition and Consumer Commission said Australians were regularly let down by their insurers through a shortage of information around coverage and benefits.

“With over 13 million people in Australia holding some form of private health insurance, the ACCC’s report reveals the challenges in finding out about, understanding and responding to insurer initiated changes to coverage and benefits,” ACCC deputy chair Delia Rickard said.

Australians had copped bill shock and received inadequate coverage given the “poor practices” seen around the warning of customers around alterations to benefits for a given policy, the ACCC concluded.

Consumers are also being needlessly confused by the complexity of offerings in the market, with this problem exacerbated in recent years.

“The ACCC will continue to work with insurers to improve compliance with the Australian Consumer Law, particularly around how insurers communicate benefit changes to their customers. We will also take enforcement action where it is needed,” Ms Rickard said.

The report focuses on the 2014-15 financial year and comes in the wake of the ACCC pursuing legal action against sector heavyweight Medibank Private over alleged misleading conduct that saw consumers left with weaker coverage than they believed.

Medibank has hinted it will fight the claims as the ACCC seeks financial penalties, the admission of guilt and corrective notices from the country’s largest health insurer.

The matter is scheduled for trial in March 2017.