ACCC concerns about complexity of private health insurance

The Australian Competition and Consumer Commission has released a report on the private health insurance industry, highlighting concerns about the impact of complex information on consumers and the market.

The ACCC report contains three key observations:

• There are market failures in the private health insurance industry which reduce consumers’ ability to compare policies and make informed choices about their future medical needs.
• Existing regulatory settings can change consumers’ incentives in purchasing health insurance. As insurers respond to market demands for affordable policies, there are greater risks of unexpected out of pocket costs for consumers.
• Current practices by some insurers are at risk of breaching the consumer laws.

“The ACCC is concerned that the complexity of private health insurance policies can affect consumers’ ability to make informed decisions about the policy that best suits their needs,” ACCC Deputy Chair Delia Rickard said. “Whether a consumer is purchasing health insurance for the first time, or reviewing and renewing a policy after many years, they have to navigate through a range of issues to make an informed decision.”