Complaints lodged against health insurance providers have jumped by nearly 25%, largely buoyed by Medibank, which shed more than 40,000 customers in the financial year 2015–2016, claims a new report.
The Private Health Insurance Ombudsman revealed record complaints have been
levelled against Australian providers in its State of the Health
Funds Report 2016.
The increase in complaints to 4416 pushed the industry to its highest
levels of consumer dissatisfaction since 1999.
Most customers fled insurance provider Medibank in the year, which lost
45,676 customers. It accounted for 40% of all complaints, even though its
share of the market is notably less at 28%.
The report claims most of the complaints were due to "administration issues
and service problems".
Such administration problems would include a Medibank system glitch that
delayed almost 4 million customers from filing tax returns in the second
half of 2016.
Medibank is also the target of Federal Court action by the ACCC for
changing its benefits without informing members.
Medibank's chief customer officer, David Koczkar, says the brand is
working to repair its image in a statement released to CHOICE.
"Our share of Ombudsman complaints has fallen recently as a result of our
investment in customer service and we remain focused on improving our
"Medibank is committed to delivering improved products and services for our
customers and simply doing a better job for them."
No other provider lost nearly as many members. According to the report, Westfund shed 865 customers,
while HCF lost 502.
The majority of customers lost by Medibank likely signed up with HBF and
Bupa, which gained 49,949 and 38,235 customers respectively. NIB too made
noteworthy gains, adding 19,501 new members.
Fewer payments were made to health insurance policyholders with members
receiving a return of 86.1% – a percentage less compared to the year
before. The report did note "significant differences in performance between
insurers with some returning over 90% of contributions".
Overall 1.35% more Australians hold a health insurance policy, at 86,939
memberships compared to the year before.