Medibank Private has accused consumer advocacy organisation Choice of making “irresponsible claims” and said it should “stick to reviewing baby prams,” after the release of a report that said Australia’s two largest health insurers had failed Australians during Covid-19.
On 7 May Choice wrote to the chief executives of the big five health funds stating the organisation was creating a scorecard to help inform consumers about the actions individual health insurers were taking to support them.
Choice told the CEOs that five steps they could take to help consumers included: a full deferral of private health insurance premium increases for 2020-21; further premium discounts to reflect limited access to services; rolling over unused extras benefits to the new year; broad access to suspension of coverage; and making hardship policies public.
Choice assessed the responses from the insurers and created a draft scorecard. The health campaigner at Choice, Dean Price, said: “We decided that the hardship policies needed more attention and that it was best to investigate this further.”
“We sent a second letter to the five health funds on 2 July 2020, this time to the senior staff that were involved in the first round of letters. That letter outlined how they performed in relation to the other health funds and asked if they wanted to do any more to improve their score before the publication of the scorecard.”
Medibank Private was asked to commit to customer-focused reforms such as publishing hardship policies for Covid-19 online.
“While everyone has said that they have put hardship policies in place, only two of the top five funds have published these policies online in an easy-to-find spot,” the letter stated. “This transparency would make it much easier for your customers to find out what they are entitled to.”
Medibank was also asked to commit to not passing on premium increases in 2020, to outline how any unforeseen financial gains would be returned to customers, and to commit to rolling over unused extras benefits. Price said Private Healthcare Australia confirmed Medibank had regulatory approval to roll over benefits.
Price said Medibank did not commit to the changes, and Bupa did not respond to the letter from Choice asking for further reforms.
HBF was ranked by Choice as the top fund in terms of Covid-19 response, as it was the only major fund so far to cancel this year’s premium increase.
“Medibank Private and Bupa have failed Australians during Covid-19,” Price said.
“With Victoria in lockdown again and unemployment still rising, it’s just outright greed for Medibank Private and Bupa to charge Australians more on October 1. These companies are saving massive amounts of money while people are unable to use many health services – companies increasing prices is simply taking advantage of the situation.”
In a statement, a Medibank Private spokeswoman said: “The scorecard from Choice is wrong and it shouldn’t be printed. They should stick to reviewing baby prams.”
Medibank’s chief executive, Craig Drummond, added that Choice was “conveniently ignoring the facts and confusing consumers at a time of great uncertainty”.
“This is just a publicity stunt from them,” Drummond said. “We know people are doing it tough, and that’s why we stick by our promise to return any savings – in addition to our $180m support package already committed – straight back to the people who matter most, our customers.
“On top of postponing premiums for six months, we have chosen to support our customers and community in additional ways. This includes a hardship program to help customers doing it tough, including a 50% premium discount for six months for those doing it hardest, which is valued at around $800 per policy.
“In all, our response exceeds $180m so far, including rolling over most annual extras limits for our ahm customers.” Ahm health insurance is a business of Medibank Private.
Drummond said the insurer was determined that customers would not be financially disadvantaged by the changes that have had to happen during Covid-19.
Bupa’s managing director, Emily Amos, said Choice had made “irresponsible claims regarding support provided to private health insurance customers during Covid-19”.
“Many of the findings are simply untrue and are a source of misinformation during a challenging and stressful time for millions of Australians,” she said. “We have provided more than $184m in financial assistance and savings direct to customers and there have been no ‘super profits’ as claimed.”
The Choice report follows an investigation from News Corp Australia that found insurers pocketed $1bn in six weeks when Australia first went into lockdown and residents stopped seeing providers like dentists and optometrists, which meant they were not claiming extras.
Amos said this was “simply untrue”. “Profits projected at the beginning of the crisis have not eventuated,” she said. “The pause on non-urgent elective surgery and some ancillary services lasted for six weeks as opposed to the several months that were originally projected. During this six-week period we paid out over $280m on almost 100,000 episodes of hospital care for around 70,000 members.”
Bupa had provided more than $184m in benefits to customers through hardship relief, she added.
In a statement, Private Healthcare Australia said Choice was trying to undermine the importance of Australia’s private health system. “Choice has become nothing more than an activist organisation promoting its own niche ideologies instead of communicating the facts to consumers,” said the CEO of Private Healthcare Australia, Dr Rachel David.
But Price said other sectors, like banking and utilities, had recognised that the impact of the pandemic would be felt for months to come.
“The private health insurance industry needs to keep up with these industries who have acted more fairly,” he said.
