In its 2016-17 annual report into the private health industry, Australia’s consumer watchdog has urged health insurers to make their products more transparent and consumer-friendly.

The Australian Competition and Consumer Commission (ACCC) said customers were forced to either abandon their hospital policies or lodge more complaints due to complex health insurance policies and unexpected out-of-pocket costs. Customers were also found to be shifting to lower-cost policies with greater exclusions or higher excesses.

“Consumers rely on private health funds engaging with them honestly so they can avoid unexpected out-of-pocket costs and make informed decisions about the policies they choose,” said Delia Rickard, ACCC acting chair, in a Canstar report. “However, we’ve found it’s currently very difficult for consumers to properly compare and choose policies for their needs, meaning many are shocked when presented with expensive bills for medical services and products they thought they were covered for.”

Rickard said the industry should be concerned by the fact that consumers were increasingly dubious if the benefits offered by health insurance policies were worth their money.

“We believe private health insurers are capable of providing consumers with significantly more detail about extent of coverage under their policies,” she said. “Clear and prominent disclosures are one measure that can rebuild waning trust in an industry where complaints increased by 30% last financial year.”

ACCC acknowledged the Department of Health’s efforts to improve the private health insurance sector, and is closely monitoring these developments, the report said

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