What health insurance funds have the most complaints?

When you start comparing private health insurance providers, you might only look at the cost and what’s covered under your preferred policy. Something that’s often overlooked is customer satisfaction and complaints. After all, complaints against health insurance providers can indicate their customer service quality and the overall experience you can expect as a member.

Let’s look into which health insurance funds get the most complaints and what sort of issues are commonly raised by members.

According to a recent report from the Office of the Commonwealth Ombudsman, a total of 1,050 complaints were lodged about private health insurance in Q1 2023–24. That’s a huge 9.7% increase compared to the same period in 2022–23.

As you might expect, the top health insurance funds by market share tend to attract the most complaints, given that they handle more members than smaller funds. But there are other factors at play as well. Here’s a closer look at the funds with the most health insurance complaints:

• Medibank (including ahm): Medibank is one of the biggest health insurers in the country, with 27.4% share of the market. During the recorded period in the report, they received 167 complaints. However, given its large market share, this complaint rate aligns fairly closely with its proportion of policyholders.
• Bupa: Bupa holds a 24.7% market share and attracted 144 complaints, representing 13.7% of the total complaints filed during the period. While Bupa’s complaint rate is lower than its market share, its overall number of complaints still means it sits among the most-complained-about funds.
• HCF: Australia’s largest not-for-profit health insurer covers 12.4% of the market and received 81 complaints, accounting for 7.7% of total complaints. Despite being a not-for-profit fund, HCF still faces service challenges that can end up with dissatisfied customers.
• nib (including GU Health): With a 9.4% market share, nib earned 58 complaints (5.5% of total complaints). The fund has a relatively lower complaints rate than some of its competitors.
• Defence Health: This restricted membership fund mainly serves members of the Australian Defence Force and their families. Despite having only a 2% market share, Defence Health received a staggering 302 complaints during the recorded period, representing 35.3% of all complaints. However, this surge in complaints was mainly down to issues following a system upgrade. There were some big service delays and payment issues that impacted their members.

Complaints made to the Ombudsman tend to fall into a few common categories, including:

• Service delays: This includes slow responses to customer enquiries, processing claims and general support. During the recorded quarter, Defence Health, in particular, saw a high volume of complaints about service delays due to their bungled tech upgrade.
• Payment delays: Another common complaint is around the reimbursement of members’ medical expenses. It’s unsurprising that people get frustrated when they don’t receive their payments in a timely manner, especially if they rely heavily on their insurance to cover essential treatments. Delays can come down to technical issues or a backlog in claims processing.
• Premium payment issues: With the cost of private health insurance premiums rising every year, it’s no surprise that problems with premium payments are a major source of complaints. Issues like incorrect billing amounts, failure to apply discounts or problems with direct-debit payments mean members will seek help from the Ombudsman.
• Miscommunication about cover: Sometimes complaints come from misunderstandings about what a policy actually does or doesn’t cover. If a member assumes their policy covers certain treatments or services, only to discover that exclusions or limitations apply, it can result in unexpected out-of-pocket costs and plenty of frustration.
• Complaints about premium increases: Annual premium increases are a reality for private health insurance policyholders. While most funds raise their premiums in line with regulatory guidelines, some members file complaints when they believe their premiums have risen disproportionately compared to the benefits they get.

If you find yourself unsatisfied with your health insurer and feel that your concerns aren’t being taken seriously, you have the option to file a formal complaint. Here’s how the process works:

1. Contact your health fund: Before escalating a complaint, raise the issue directly with your health insurer. Your fund will have a customer service team and formal complaint-handling processes that will hopefully resolve your issue quickly. Make sure you document all communications, including dates, times and the names of representatives you spoke with.
2. Escalate the issue: If your problem is still unresolved after contacting customer service, ask to have the matter escalated to a senior staff member or a specialist complaints team. Some issues, especially those that involve premium payments or claims, will require further investigation and approval from higher-ups at the company.
3. Submit a complaint to the Office of the Commonwealth Ombudsman: If your health fund is unable – or unwilling – to resolve your complaint, you can escalate the issue to the Office of the Commonwealth Ombudsman. You can lodge your complaint online or by calling 1300 362 072.
4. Provide paperwork: When lodging your complaint with the Ombudsman, be prepared to give them any and all documentation supporting your claim. This might include copies of correspondence with your health fund, policy details, relevant medical bills and receipts, etc.
5. Complaint resolution: The Ombudsman will investigate your complaint and liaise with your health fund to try to resolve the issue. Most complaints should be resolved within 30 days, but more complex matters will take longer.

While some health insurance funds get more complaints than others, it’s important to remember that larger funds like Medibank and Bupa will naturally receive more complaints simply due to their size. However, funds attract a disproportionately high number of grievances compared to their market share, it might indicate deeper operational issues.

If you have any issues with your health insurer, know that you have the right to escalate the matter, first through your insurer and then through the Ombudsman if necessary. And if all else fails, it’s time to switch health funds to a better one.