Restricted policies already had problems before the Bupa announcement. The Private Health Insurance Ombudsman (PHIO) has repeatedly warned that downgrading policies to restricted or budget cover often leaves customers without the cover they need or high unexpected out-of-pocket costs.
In the last quarter, the highest number of complaints to PHIO were about restrictions and exclusions.
The health minister, Greg Hunt, asked the Ombudsman to investigate the Bupa cuts and a June report said Bupa didn't make its changes clear enough in its premium update letter to members: "It is difficult to say whether some consumers will overlook or misunderstand the fact that their policy has been downgraded because of the design of this communication."
The Ombudsman recommended that Bupa's next communication to its members "should give increased prominence to the detrimental changes". The Ombudsman also concluded that Bupa customers in regional areas were more disadvantaged than customers living in capital cities, as they are more likely to use public hospitals.