Consumer watchdog loses cost-gouging claim against health insurer Medibank

By ruling in favor of the health fund of the Federal Court said no reasonable consumer would understand the word “cover” used by a health fund that means “to cover completely”.

The ACCC will have to cover Medibank costs.

Medibank had limited the benefits that it has paid to the hospital pathology and radiology services in September 2014, but has not told its members about the change. Photo: Paul Jeffers

“We have taken this case because we believed that Medibank failure to advise customers of changes to their coverage for the hospital pathology and radiology services affected vulnerable consumers,” ACCC chairman Rod Simms said.

“The COMMISSION believes that consumers have the right to be informed in advance of important changes to their private health insurance,” he said.

“In particular, we believed that Medibank changes affect people with chronic health conditions who were in need of these services regularly.”

“The ACCC has carefully reviewed the judgment,” Mr. Sims said.

RELATED: Medibank’s secret cuts to rebates for scans and blood tests leaves members hundreds of dollars out of pocket

The ACCC has believed that Medibank changes affect people with chronic health conditions who were in need of these services regularly. Photo: AAP

News Corp has revealed how Medibank had limited the benefits that it has paid to the hospital pathology and radiology services in September 2014, but has not told its members about the change.

It was a change that has increased the out of pocket expenses to Medibank members.

For example, before Medibank had been paying about $516 for a CAT scan, but in 2014 that reimbursement of the Medicare schedule fee of $385 leaving members $131 out of pocket.

Health fund rules require that insurers must tell members when they make changes that reduce the benefits they receive.

Originally published as members of the ACCC loses Medibank ‘dupe’ request