The AMA welcomes the Australian Competition and Consumer Commission’s decision to launch legal action against Medibank Private over alleged misleading and deceptive conduct.
AMA President Dr Michael Gannon says the AMA has long been highly critical of the actions of insurers making changes to their health cover without informing policy holders, and it is pleasing to see that at least one is now being held to account.
“It has become a distressingly common experience for patients to think they are covered for the cost of medical treatment, only to find that they are lumbered with unexpected out-of-pocket costs,” Dr Gannon says.
“It is completely unacceptable for insurers to make changes to the cover they provide without informing policyholders, and it is very important that this type of behaviour is now being called out.”
The ACCC instituted proceedings in the Federal Court against Medibank alleging it contravened the Australian Consumer Law by engaging in misleading conduct, making false or misleading representations and engaging in unconscionable conduct.
The allegations are in relation to Medibank’s failure to notify Medibank members and members of its subsidiary brand, ahm, regarding its decision to limit benefits paid to members for in-hospital pathology and radiology services.
The ACCC alleges that Medibank did not provide members with any advance notice of the change despite previously representing that it would do so. Medibank also adopted a strategy of keeping communications about this change contained and reactive, the ACCC says. The ACCC alleges that Medibank’s conduct was misleading and, in all the circumstances, unconscionable.
“Consumers are entitled to expect that they will be informed in advance of important changes to their private health insurance cover, as these changes can have significant financial consequences at a time when consumers may be vulnerable,” ACCC Chairman Rod Sims says.
“Private health insurers must ensure their disclosure practices comply with the Australian Consumer Law. Competition and consumer issues in the health and medical sectors are a current enforcement priority for the ACCC.”