Health insurance complaints spike

As we get older, the number of health complaints we have seem to rise as our age does. There’s little we can do about some of them – it’s simply the price we pay for a longer life. 

One thing we should be able to do without though is health insurance complaints. Sadly, that’s not been the case for some, according to a new ombudsman’s report.

The Commonwealth Ombudsman recently released its 19th annual State of the Health Funds Report revealing an increase in complaints. It shows that 3429 complaints were made about private health insurance in 2022-23, an increase of 26.8 per cent.

Several factors contributed to the big increase, the report said, with one standing out – the October 2022 Medibank data breach. The breach resulted in nearly 10 million current and former customers having personal information stolen by hackers. Unsurprisingly, this contributed to a big spike in complaints about Medibank to the ombudsman’s office.

Other issues that contributed to the increase included a rise in cancellation complaints. The ombudsman’s report stated this was largely attributable to complaints about Peoplecare Health Limited (Allianz).

Peoplecare is an overseas visitor and overseas student health cover insurer affected by the end of pandemic travel restrictions. This allowed students and visitors to return to Australia, resulting in Allianz receiving high numbers of cancellation and refund requests. These higher numbers translated to 308 complaints.

Other reasons for complaints

Kate Browne, Compare Club’s head of research, said prices rises outstripping the CPI was another cause of customer dissatisfaction.

“It’s understandable why people are dissatisfied with their health fund,” Ms Browne said. This occurs “when premiums rise higher than inflation, but the service older Australians receive doesn’t match the price”.

Those with health insurance have a right to feel they’re getting a service level that matches the price, Ms Browne said.  “Everybody’s got a different perception of what good looks like, so the one question health fund members need to ask is, do you feel you’re getting value for money from your insurer? Loyalty is a two way street. If you’re happy and are paying a fair price, great, but don’t be silent if you’re not.

Ms Browne said the report “highlights just how confusing Aussies find health insurance – even those who’ve held it for decades”.

Which insurers are in the firing line?

Looking at raw numbers, Medibank came out ‘on top’ of the complaints table, with 29.5 per cent of all complaints. This placed them ahead of BUPA (23.7 per cent), HCF (13.5 per cent), and NIB (10.1 per cent).

However, this may not paint a true picture of dissatisfaction levels, as it does not factor in the market share of health insurers. HCF’s story is similar (12.5 per cent market share versus 13.5 per cent complaints) as is NIB’s (9.6 per cent versus 10.1 per cent).

Medibank’s 29.5 per cent complaint levels appear less unfavourable considering they have the largest share of the market (27.1 per cent). Likewise BUPA’s complaints share roughly reflects its market share of 24.9 per cent.

On the other hand, Australian Unity’s complaint level, low overall at 4.7 per cent, looks less impressive considering its market share is only 2.2 per cent. Conversely, HBF has a 7.7 per cent market share but attracted only 3.7 per cent of complaints. 

Ms Browne suggested becoming more informed about individual insurers is the best option for customers. “My advice would be if you’re not sure about anything on your policy, ask … your fund, broker or expert. The more informed you are, the more satisfied you’ll be when you find a good policy.”

Have you had reason to make a complaint against your health insurer? Were you happy with the outcome? Let us know via the comments section below.

Also read: Common mistakes over-50s make on their health insurance

Disclaimer: This article contains general information about health issues and is not advice. For health advice, consult your medical practitioner.