Private health insurers may be breaking the law by varying customers’ policies: ACCC

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ACCC deputy chair Delia Rickard says health insurance policies can be confusing and misleading. Photo: Supplied

ACCC deputy chair Delia Rickard says health insurance policies can be confusing and misleading. Photo: Supplied

 

Private health insurers have been slammed by the consumer watchdog for “market failures” that are leaving customers overwhelmed by the volume of policy options and confused by complex information.

The Australian Competition and Consumer Commission in its report to the Senate about anti-competitive practices said it was concerned that customers were facing growing challenges in sifting through a large number of policies with greater exclusions.

The watchdog concluded market failures in the $21 billion private health insurance industry were eroding consumers’ ability to compare policies and make informed choices about their future medical needs.

It also found as demand for affordable policies grow, there were greater risks of “unexpected out-of-pocket costs”.

About half of the population holds more than five million policies for their hospital treatment costs.

“Consumers may encounter significant difficulty in determining what a procedure will cost and how the relationship between their insurer and the relevant practitioner or hospital will affect this cost,” said ACCC’s 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.”

Ms Rickard said it was scrutinising the health insurance industry to address concerns about “incomplete” policy information that are “not only confusing but also misleading”.

The report – Information and informed decision-making in private health insurance – covers 2013-14 and focuses on anti-competitive by health insurers and providers in relation to private health insurance.