The Australian Competition and Consumer Commission has released a report on the private health insurance industry, highlighting concerns about the impact of complex information on consumers and the market.

With over 11 million Australian consumers holding over five million policies for their hospital treatment costs, the report reveals the increasing challenges facing consumers in choosing between a large number of policies with greater exclusions.

The ACCC report contains three key observations:

  • There are market failures in the private health insurance industry which reduce consumers’ ability to compare policies and make informed choices about their future medical needs.
  • Existing regulatory settings can change consumers’ incentives in purchasing health insurance. As insurers respond to market demands for affordable policies there are greater risks of unexpected out-of-pocket costs for consumers.
  • Current practices by some insurers are at risk of breaching the consumer laws.

“The ACCC is concerned that the complexity of private health insurance policies can affect consumers’ ability to make informed decisions about the policy that best suits their needs. Whether a consumer is purchasing health insurance for the first time, or reviewing and renewing a policy after many years, they have to navigate through a range of issues to make an informed decision,” ACCC Deputy Chair Delia Rickard said.

“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. 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.”

“In line with the ACCC’s current focus on the health and medical sector, the ACCC will be closely reviewing some practices in the health insurance industry to address concerns regarding incomplete policy information that are not only confusing but also misleading,” Ms Rickard said.

The report’s findings are based on extensive consultation with key industry and government stakeholders and consumer research.

The report is available at Private health insurance report 2013-14.


Each year, the ACCC produces a report on ‘any anti-competitive or other practices by health insurers or providers which reduce the extent of health cover for consumers and increase their out-of-pocket medical and other expenses’ in accordance with a Senate order.

This report covers the 2013-14 reporting period and aligns with the ACCC’s 2015 Compliance and Enforcement Policy which identifies competition and consumer issues in the health and medical sectors as a priority.