Top health insurance complaints

Health insurance complaints have gone down three years in a row. But gripes remain around waiting periods, benefit payments and membership cancellation.

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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.

What’s in a complaint?

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”.

Number of complaints each year since 2009-2010

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 20.8%, 11.2%, and 8.3% in the past three years respectively.

YearNumber of complaints received
2009-102,618
2010-113,070
2011-122,995
2012-132,955
2013-143,427
2014-154,265
2015-164,416
2016-175,750
2017-184,553
2018-194,042
2019-203,706

What’s behind most health insurance complaints?

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.

5 most common health insurance complaints

The top five private health insurance complaints made during the most recent quarter - between 1 January and 31 March 2021 - were as follows:

Membership cancellation: 71 complaints

Complaints involving health fund membership generally concern delays or issues 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.

General service issues: 65 complaints

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.

Waiting periods: 62 complaints

Health funds can 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.

Delay in benefit payment: 60 complaints

Typically, these complaints come about in two ways. Either from the health insurer or the insurer's medical practitioner not clearly stating which signs and symptoms were relied on for claims assessments, or a consumer misunderstands exactly how a pre-existing condition is defined.

An example could include hospital and extras policies with unexpected exclusions and restrictions. Basic and budget levels of cover often restrict or exclude services that many fund members assume will be included in cover as they are routine treatments.

Service delays: 57 complaints

Such complaints are usually received from consumers struggling to egt hold of their insurer or concerned about delays from a provider's customer service staff.

Meanwhile, a total of 45 complaints were made around incentives, with the majority (40) having to do with the Lifetime Health Cover (LHC) loading. Other complaints included the Medicare Levy Surcharge (MLS) and the Private Health Insurance Rebate.

Who was complained about?

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.

As the table below shows, the most complained about health funds also tend to have the bigger market shares.

Top 5 most complained about health funds in 2019-20

Name of fundPercentage of complaintsMarket share
HCF26.8%11.7%
Bupa20.5%25.4%
Medibank & ahm19%26.9%
nib9.5%9.2%
Australian Unity4.8%2.6%

What should I do if I have a complaint?

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:

  • By phone. The complaints number is 1300 362 072 and the office is staffed from 9am to 5pm Monday to Friday (AEST).
  • Online. An online complaints form can be accessed through the Ombudsman’s website.
  • By post. You can post your complaint to Commonwealth Ombudsman, GPO Box 442, Canberra ACT 2601.

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