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Ombudsman questions health insurance products.



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Ombudsman Questions Health Insurance Products Jenny Macklin - Shadow Minister for Health

Media Statement - 30 October 2000

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The latest annual report from the Private Health Insurance Ombudsman raised serious concerns about the morality and legality of some private health insurance products, Shadow Health Minister, Ms Jenny Macklin said today.

"There has been a rash of consumer problems since the "run for cover" advertising campaign saw many people make a last minute decision to buy health insurance. The Private Health Insurance Ombudsman reports that his workload had increased by 23% even before the deadline for joining had passed.

"The Ombudsman has criticised the funds' level of commitment to consumers and highlighted the mismatch between what was promised and what the funds provide.

"He has even questioned the morality of some products which are based on exclusion of high cost treatments and which force privately insured people to use public hospitals for serious illness," Ms Macklin said.

Key findings in the Private Health Insurance Ombudsman's report include:

There is a need for mandatory procedures to advise consumers of the cost of treatment in advance. The Government's insistence on voluntary guidelines has "not produced any noticeable reduction in the difficulties faced by consumers"

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A warning to consumers that products which exclude some treatments are "not good value" and may breach section 71(2) of the Trade Practices Act which requires products to be "fit for the purpose" for which they are sold. (Case of Mrs Gold, pg 24)

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An expert committee established in September 1999 to recommend new rules on "pre existing ailments" has yet to report. This remains a sizeable proportion of complaints which take "months even years" to resolve. (Case of Mr Bronze, pg 21)

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The lack of comparability between health fund products has generated problems with people trying to change between funds and being unfairly forced to serve a new waiting period (Case of Mrs Silver, pg 22)

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On Friday the ACCC launched legal action against Medibank Private for false, misleading and deceptive advertising. The ACCC says Medibank Private advertised there would be no rate increases in 2000 yet it increased its prices on July 1st. It also says Medibank Private advertised that it was waiving waiting periods when this only applied to some less important waiting periods.

Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.