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.
In 2022–23, the Commonwealth Ombudsman received 3,429 complaints regarding private health insurance, marking a 26.8 percent rise from the previous year. While the majority of complaints were directed at Australian private health insurers, they also received issues related to overseas visitor and student health cover providers, health insurance brokers, and healthcare providers.
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 2009-2023
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, but started to rise again more recently.
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
2022-23
3,429
Finder survey: What is most important to Australians of different ages when choosing a health fund?
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%
Source: Finder survey by Pure Profile of 1006 Australians, December 2023
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
Membership cancellation
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.
General service issues
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
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.
Delay in benefit payment
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.
Service delays
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.
Health insurance complaints by fund
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.
How do I make a health insurance 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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Depending on your age, you may be eligible for an
aged-based discount. This is used to estimate your
rebate.
Under 65
65 - 69
70 or older
What's your household's taxable income?
This is the combined income you and your spouse earn before tax. It's needed to calculate the correct Australian government rebate.
$93,000 and under
$93,001 to $108,000
$108,001 to $144,000
$144,001 and over
What kind of health insurance do you need?
Combined (Extras + Hospitals)
Extras
Hospital
What level of hospital coverage would you like?
You can change this at any time later.
Legend
Covered
Restricted cover, You may be partially covered for
this category.
Not covered. Optional for insurer to include.
*Prices updated March 2024, in line with Finder's
database of health insurance policies. Prices are based
on a single individual with less than $93,000 income and
living in Sydney with a $750 excess.
What extras cover do you need? (Optional)
Select as many as you want or move to the next step
Preventative & general dental
Major dental & implants
Optical
Physiotherapy
Podiatry
Non-PBS pharmaceuticals
Chiropractic
Emergency ambulance
Remedial massage
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Tim Bennett is a Finder insurance & utilities expert. For over 10 years he's reported on news, politics, finance and other topics as a journalist and radio presenter. Tim's roles have included radio news reader and breakfast at the ABC, news producer for SBS and producer for Fairfax Media. Tim regularly appears as a health insurance expert on programs like Sunrise and SBS news, as well as in the Australian, The Daily Telegraph, The Courier Mail and more. See full bio
Tim's expertise
Tim has written 122 Finder guides across topics including:
Tim Falk is a writer for Finder, writing across a diverse range of topics. Over the course of his 15-year writing career, Tim has reported on everything from travel and personal finance to pets and TV soap operas. When he’s not staring at his computer, you can usually find him exploring the great outdoors. See full bio
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Depending on your age, you may be eligible for an
aged-based discount. This is used to estimate your
rebate.
Under 65
65 - 69
70 or older
What's your household's taxable income?
This is the combined income you and your spouse earn before tax. It's needed to calculate the correct Australian government rebate.
$93,000 and under
$93,001 to $108,000
$108,001 to $144,000
$144,001 and over
What kind of health insurance do you need?
Combined (Extras + Hospitals)
Extras
Hospital
What level of hospital coverage would you like?
You can change this at any time later.
Legend
Covered
Restricted cover, You may be partially covered for
this category.
Not covered. Optional for insurer to include.
*Prices updated March 2024, in line with Finder's
database of health insurance policies. Prices are based
on a single individual with less than $93,000 income and
living in Sydney with a $750 excess.
What extras cover do you need? (Optional)
Select as many as you want or move to the next step
Preventative & general dental
Major dental & implants
Optical
Physiotherapy
Podiatry
Non-PBS pharmaceuticals
Chiropractic
Emergency ambulance
Remedial massage
Email me my results (optional)
To get a copy of your results for later, add your email below
