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Private healthcare in Australia

28 October 2015 by News Desk

health_doctor2Almost 50% of adults in Australia have private health insurance, now government regulators say private health policies are too complex and confusing.

Consumers are faced with a barrage of different information, policies, terms and conditions and may not be getting the best deal or treatment. That’s the view of the Australian Competition and Consumer Commission in a new report that highlights concerns over the fast-growing private healthcare industry.

With over 11 million people in Australia holding over five million policies for their hospital treatment costs, the report reveals the increasing challenges facing consumers in choosing between a large number of policies with greater exclusions. The ACCC report contains three key observations:

1) There are market failures in the private health insurance industry which reduce consumers’ ability to compare policies and make informed choices about their future medical needs.

2) Existing regulatory settings can change consumers’ incentives in purchasing health insurance. As insurers respond to market demands for affordable policies there are greater risks of unexpected out-of-pocket costs for consumers.

3) Current practices by some insurers are at risk of breaching consumer laws.

“The ACCC is concerned that the complexity of private health insurance policies can affect consumers’ ability to make informed decisions about the policy that best suits their needs. Whether a consumer is purchasing health insurance for the first time, or reviewing and renewing a policy after many years, they have to navigate through a range of issues to make an informed decision,” ACCC Deputy Chair Delia Rickard said.

“Consumers may encounter significant difficulty in determining what a procedure will cost and how the relationship between their insurer and the relevant practitioner or hospital will affect this cost. It is in the interests of both consumers and industry to be as clear and transparent as possible so that consumers who are purchasing insurance can make the best decisions about their level of coverage.”

“In line with the ACCC’s current focus on the health and medical sector, the ACCC will be closely reviewing some practices in the health insurance industry to address concerns regarding incomplete policy information that are not only confusing but also misleading,” Ms Rickard said.



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