An appeal by the ACCC against a Federal Court judgment in relation to Medibank Private Limited (Medibank) has been dismissed by the Full Federal Court.

The ACCC alleged Medibank made false, misleading or deceptive representations and engaged in unconscionable conduct in relation to its failure to notify Medibank’s, and its subsidiary ahm’s, members of its decision to limit benefits for in-hospital pathology and radiology services, despite representing across a number of its communication and marketing materials that it would.

The Federal Court dismissed these allegations in August 2017, prompting the ACCC to lodge an appeal to the Full Federal Court.

Although the Full Court held that Medibank acted harshly and unfairly, it found this is not enough to establish statutory unconscionability.

“The ACCC brought this appeal to seek clarity from the Full Federal Court on whether it was acceptable for Medibank to choose not to fully inform consumers, including members with chronic health conditions, in advance about important changes to their private health insurance cover,” ACCC Chair Rod Sims said.

“Having a clear and unambiguous understanding of what is included in a health insurance policy is essential to all Australians.”

“Despite today’s result, we are committed to taking action against businesses, including private health insurers, if we have evidence they are misleading their customers,” Mr Sims said.

The ACCC is carefully considering the Full Federal Court’s decision.


Ahm is a subsidiary health insurance brand of Medibank Private Limited.

Medibank is Australia’s largest private health insurer and has approximately 3.7 million members through its Medibank and ahm brands. The conduct affected most Medibank and ahm hospital policies in place from 1 January 2012 to 15 June 2016.

From at least 1 January 2012, Medibank had agreements with many pathology and radiology providers who supplied services to hospital patients (such as blood tests, x-rays, CT scans and MRI scans). Under these agreements, when these providers charged above the Medicare Benefit Schedule (MBS) fee, known as ‘the gap’, Medibank paid the gap on behalf of ahm and Medibank customers.

From 1 September 2014, Medibank terminated or phased out these agreements. As a result of the agreements no longer being in force, Medibank and ahm members were no longer completely covered for in-hospital pathology or radiology services, and had to pay the gap as an out-of-pocket expense.

On 15 June 2016, the ACCC instituted proceedings against Medibank.

On 30 August 2017, the Federal Court dismissed the ACCC’s case.

On 20 September 2017, the ACCC lodged an appeal against the dismissal.