Each year, the Commonwealth Ombudsman issues a report detailing trends and issues in the Australian private health insurance market. It includes figures of the complaints the independent body receives regarding health insurance and private health funds.
Here are the key stats and what makes up the health industry's most complained about problems.
The Commonwealth Ombudsman role is to protect the interests of health insurance consumers. To this end, one of its key roles is dealing with complaints not only from health fund members but also from health funds, private hospitals, health insurance brokers and medical practitioners.
According to the Ombudsman, a complaint “must be an expression of dissatisfaction with a matter arising out of or connected with a private health insurance arrangement”.
Complaint numbers have been relatively steady over the last decade. That said, in the period covering 2013-14, a total of 4,265 complaints were received - a jump of 24% on the previous year.
Interestingly, the overall number of complaints has decreased by a significant amount in the past 5 years.
| Year | Number of complaints received |
|---|---|
| 2009-10 | 2,618 |
| 2010-11 | 3,070 |
| 2011-12 | 2,995 |
| 2012-13 | 2,955 |
| 2013-14 | 3,427 |
| 2014-15 | 4,265 |
| 2015-16 | 4,416 |
| 2016-17 | 5,750 |
| 2017-18 | 4,553 |
| 2018-19 | 4,042 |
| 2019-20 | 3,706 |
| 2020-21 | 3,496 |
| 2021-22 | 2,704 |
| Response | 75+ yrs | 65-74 yrs | 55-64 yrs | 45-54 yrs | 35-44 yrs | 25-34 yrs | 18-24 yrs |
|---|---|---|---|---|---|---|---|
| The fund is trusted | 50% | 34.88% | 36.02% | 27.22% | 43.24% | 39.47% | 31.76% |
| The fund is not-for-profit | 38.64% | 25% | 16.77% | 9.47% | 15.14% | 15.26% | 8.24% |
| The fund is recommended by my friends or family | 15.91% | 7.56% | 9.32% | 8.28% | 18.92% | 14.74% | 18.82% |
| The fund has good online reviews | 9.09% | 8.14% | 13.04% | 11.24% | 18.92% | 14.21% | 9.41% |
| None of the above | 4.55% | 8.14% | 6.21% | 10.06% | 2.7% | 3.68% | 1.18% |
| The fund is good for the environment | 4.55% | 2.33% | 3.73% | 3.55% | 7.03% | 7.37% | 7.06% |
| The fund is popular | 4.55% | 1.16% | 6.83% | 3.55% | 7.03% | 10.53% | 12.94% |
| The fund gives me reward points (e.g. Qantas, Frequent Flyer etc) | 2.27% | 2.91% | 1.86% | 6.51% | 8.11% | 6.84% | 5.88% |
| The fund is restricted to my industry (e.g. teachers, defence etc) | 2.27% | 2.91% | 1.86% | 3.55% | 2.16% | 3.68% | 3.53% |
There's no single issue that has prompts complaints to the Ombudsman. Instead, there are multiple issues and developments at play.
One of the key concerns among health fund members is the annual premium increase on 1 April each year. The cost of private health insurance is a constant topic of complaints received.
Another reason for this spike is a rise in what are sometimes referred to as “junk” policies. Most health funds offer entry-level hospital cover policies that only provide a basic level of cover. However, some consumers are unaware of the restrictions and exclusions that apply to their policy and often get a nasty surprise when they are hospitalised and find out that their health fund won’t offer any cover.
For a better understanding of the driving forces behind increased complaint numbers, let’s take a look at the most commonly complained about issues across the health insurance industry.
Complaints about health fund membership are generally due to delays in funds processing policy cancellations, as well as funds cancelling memberships when premium payments are in arrears. Another significant cause for complaint was delays in issuing clearance certificates required by consumers to switch from one health fund to another.
Complaints about service issues tend to arise as a result of other complaints. These include issues such as poor customer service, funds being too slow to rectify simple issues, problems paying premiums and unsatisfactory internal processes for dealing with complaints.
Health funds generally impose a 12-month waiting period on treatments for pre-existing conditions, and disputes around what constitutes a pre-existing condition and how this waiting period is applied were a common cause for complaints.
These complaints tend to come about in two ways. Either there's confusion about which symptoms are relied on for claims assessments, or a consumer misunderstands exactly how a pre-existing condition is defined. An example could be hospital and extras policies with unexpected exclusions and restrictions, which can often be misunderstood.
These complaints are usually from consumers struggling to contact their fund, or concerned about delays from a provider's customer service. Meanwhile, 45 complaints were made around incentives, with the majority (40) about the Lifetime Health Cover (LHC) loading. Other complaints included the Medicare Levy Surcharge (MLS) and the Private Health Insurance Rebate.
In the period from 1 January to 31 March 2021, complaints about health funds dominated the statistics, making up a whopping 772 (or 85%) out of 910 complaints received. Complaints about overseas visitors funds came next with 105, followed by Other (e.g. legislation, ambulance services, industry peak bodies) with 23, then health insurance brokers with 8 and hospitals with 2. Doctors, dentists and other medical providers scored a perfect zero.
This chart shows the weighted volume of complaints received by each health fund, according to the Commonwealth Ombudsman. The lower the number, the better. Only non-restricted funds with a national market share of at least 0.1% are included here. Medibank is seventh overall in this ranking. The weighting ensures that funds are compared fairly; larger funds serve more customers so can potentially get more complaints.
Before contacting the PHIO, you should contact your health fund to try to resolve your complaint. If no resolution is reached or you’re unhappy with their response, you can make a complaint to the Commonwealth Ombudsman in the following ways:
Why compare health insurance with Finder?
We don't ask for your phone or email to see prices.
With 1 click, you can open your results to nearly every fund in Australia.
You pay the same price as going direct – we charge no fees.
Why compare with us
Our customers trust us
You pay nothing. Finder is free to use. And you pay the same as going direct. No markups, no hidden fees.
You save time. We spend 100s of hours researching health insurance so you can sort the gold from the junk faster.
You can trust us. We say it like it is. We aren't owned by an insurer and our opinions are our own.
Prenatal care in Australia is covered by Medicare, meaning it’s mostly free through the public system. You can choose to go private, which comes with a lot of benefits – but there are out-of-pocket expenses to watch out for.
The 8501 visa condition means you need to get health insurance for your stay.
See if Latrobe health insurance is right for you.
RT Health Fund offers a range of health cover options to transport and energy industry employees and their families.
Do you qualify for Defence Health health insurance? Find out what you could receive and what options are available to ADF members as well as their families and siblings.
Looking for health cover but aren't sure which policy is best? This article looks at Australian Unity's health insurance options and helps you decide whether any of its policies are what you need.
Our experts compared 30+ funds and analysed hundreds of policies to help you find the best health insurance.
Start your search today to find a Queensland health fund that offers value for money and the cover you need.
HCi is a not-for-profit health fund that offers hospital, extras and combined cover that includes a wide range of medical services and treatments.
As a not-for-profit brand, HIF is able to offer low premiums across both hospital and extras policies.
