Complaints made to health funds skyrockets: see how your fund performed

Complaints made to private health insurers have skyrocketed by almost 27 per cent in the past financial year | SEE THE WORST PERFORMING FUNDS

Health fund complaints are rising, igniting concern Australians are not getting value for money on their policies.

Complaints made to private health insurers have skyrocketed by ­almost 27 per cent in the past ­financial year, as a report reveals the worst performing funds and ­ignites concern that Australians are not getting value for money on their policies 

The most complained about health insurer in 2022-23 was Medibank, responsible for 29.9 per cent of all complaints, followed by Bupa (23.7 per cent), HCF (13.5 per cent), NIB (10.1 per cent) and Australian Unity (4.7 per cent).

According to data published by the Commonwealth Ombudsman, health funds are spending up to an average $1200 per policy on administration fees rather than benefits for hospitals, rebates or other services.

CBHS Corporate, a major not-for-profit fund, spent $1187 on ­average per policy on internal ­bureaucracy such as IT upgrades, paying call centre staff and electronic billing and claims rather than on member benefits.

Medibank was the most complained about health insurer in 2022-23. Picture: NCA NewsWire / Christian Gilles

Other health funds spent hundreds of dollars on admin fees per policy including Bupa ($406), AIA Health $435, Australian Unity ($570), NIB ($438), HCF ($472), HCI ($821) and Medibank ($263).

The surge in complaints and money being spent on management has been slammed by doctors who warn Australians are not getting the best return on their memberships.

Australian Medical Association vice-president Danielle McMullen said costs for private health insurance were “really blowing out”, and called on the federal government to force funds to return a mandated percentage of premium fees to the consumer in the form of rebates and benefits.

After health insurance premiums rose 3 per cent for more than 15 million policyholders on April 1, Dr McMullen said doctors recognised that organisation needed to turn a profit but that “we can’t see increasing premiums just going into the pockets of the insurance companies”. “The report really highlights how much insurance companies pay in benefits is really opaque,” she said.

The increase in complaints was driven by several factors, including Medibank’s data breach, as well as issues relating to service, benefits and membership, the report said.

Consumers complained about poor customer service, inadequate or delayed responses, poor internal escalation processes causing policyholders to become “increasingly dissatisfied”.

But Private Healthcare Australia, the peak body representing for-profit insurers, defended manage­ment expenses, saying they were all necessary costs.

It said the number of complaints was “extremely low” and represented a reduction of 15 per cent compared to 2018-2019 levels.

Members Health Fund Alliance, representing the not-for-profit funds, said the surge in complaints from the previous year was driven by an increase in Australians using private health insurance after claims fell during the Covid-19 pandemic.

Alliance chief executive Matthew Koce noted complaints ­received by health funds were also very low compared to other forms of insurance. “While a 27 per cent increase sounds like a lot, coming off such a low base, it equates to just 725 more complaints and is more in line with the historical average,” Mr Koce said.

Medical Technology Association of Australia chief executive Ian Burgess, representing medical device manufacturers, said it was “clear insurers have the capacity to help drive premiums down by cutting back on their own ‘management expenses’, corporate perks and executive bonuses.”

“It’s simply unacceptable that, while everyday Australians are struggling with the cost-of-living crisis, the only thing growing quicker than insurers’ skyrocketing management expenses are their own profits,” Mr Burgess said.