ACCC reports on changes to private health insurance policies

31 October 2016

The Australian Competition and Consumer Commission has released its annual report on the private health insurance industry, highlighting concerns about how some insurers notify consumers of reductions in their insurance 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.

The ACCC report finds that among some insurers, poor practices exist around notifying consumers of cuts to their insurance coverage and benefits. These practices are leading to bill shock, inadequate cover and reduced access to health care. Some examples include insurers:

  • not notifying consumers of reductions in their coverage or benefits, including changes to insurers’ arrangements with health care service providers
  • using unclear, uninformative or misleading information to notify consumers of reductions in their insurance coverage or benefits.

In addition, the report finds that complexity in the Australian private health insurance market continues to increase and this is making it harder for consumers to understand and react when insurers change their coverage or benefits.

“The Private Health Insurance industry has obligations to consumers under the Australian Consumer Law. Insurers must give consumers clear advance warning when they cut the level of cover or benefits available through a consumer’s existing private health insurance policy, ” Ms Rickard said.

“If consumers are not given clear notice of changes to their insurance, unexpected out of pocket expenses and limits on their access to medical treatment can cause great harm and detriment. The ACCC’s research found vulnerable consumers, particularly younger and non-English speaking people, the elderly, those with chronic illnesses and those undergoing continuing treatment can be at greater risk of experiencing these impacts.” 

“The ACCC will continue to work with insurers to improve compliance with the ACL, 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 is available at Private Health Insurance report 2014-15.


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

Each year, the ACCC is required to produce 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 standing Senate Order.

This report covers the 2014-15 reporting period and aligns with the ACCC’s 2016 Compliance and Enforcement Policy, which identifies competition and consumer issues in the health and medical sectors as a priority.

In June 2016, the ACCC instituted proceedings in the Federal Court against Medibank Private Limited. The ACCC’s allegations include that Medibank had contravened the ACL in relation to its failure to notify its members (and members of its subsidiary brand, ahm) of its decision to limit benefits paid to members for in-hospital pathology and radiology services. The matter is still before the Federal Court and is scheduled for trial in March 2017.  


Release number: 
MR 199/16
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