Consumer Watchdog to Sue over Incorrectly Rejected Health Insurance Claims

Posted Nov 21, 2019.

Recent revelations by an Australian consumer watchdog has again emphasised the importance of not always accepting an insurance companies decision if your claim has been rejected.

The watchdog in question,  the Australian Competition and Consumer Commission (‘ACCC’), will be taking civil legal action in the Australian federal court against Medibank, claiming that the health insurance company had told a number of policyholders that they were not covered for certain conditions and as a result, had incorrectly rejected their policy claims.

Incorrect claims assessment

According to the ACCC legal action, Medibank, who are Australia’s second largest health insurance provider behind BUPA and who currently enjoy a 29% share of the domestic market, incorrectly told a number of its policyholders covered by their ‘boost’ and ‘lite’ health insurance policies that they were not eligible to claim for reconstruction procedures or joint assessments. These incidents affected over 800 policyholders over a five year period up to July 2018, when the insurer reported itself to the regulator. During this time, around 60 policy holders had also upgraded their cover and had paid higher premiums as a result.

In commenting on the forthcoming legal action, an ACCC spokesperson said:

 “We will allege that Medibank incorrectly rejected claims or eligibility enquiries from over 800 members for benefits that they were entitled to and were paying for…in some cases, it is alleged that members who upgraded their policies were also required to serve a further waiting period to access these procedures. Some members were forced to delay surgery due to high out-of-pocket costs for these procedures and to seek alternative remedies to manage pain.”

Responding to the allegations and apologising to their customers, Medibank said that internal process failures and incorrect data entry codes when policies were set up had resulted in the incorrect responses to policyholder queries and claims. Medibank also added that since the errors were spotted in 2017, over A$740,000 in compensation had already been paid to policyholders

If your health insurance claim is being disputed, Bakers Solicitors can help

At Bakers Solicitors, disputed and rejected insurance claim cases are dealt with on a no win, no fee basis. There are no upfront or unexpected costs, so if you feel you have been treated unfairly by an insurance company please contact us today for straightforward and professional assistance. You can 
contact us by email, arrange a free consultation online or ring us on FREE on 0800 731 7284.