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Federal Court dismisses ACCC’s allegations against Medibank

Following years of repeated calls for the Australian Competition and Consumer Commission (ACCC) to take action against health funds for misleading and unconscionable behaviour, the ADA is disappointed by last month's decision by the Federal Court to dismiss proceedings brought by the ACCC against Medibank.  

The ACCC’s case was based on the premise that Medibank had failed to advise customers of changes to their cover for in-hospital pathology and radiology services, despite assurances that it would so. This type of behaviour has been repeatedly highlighted by the ADA and its members as a continuing serious issue and so, the decision by Justice O'Callaghan to dismiss all allegations when there was an opportunity to take action against insurers and stamp the behaviour out is a blow for consumers everywhere.  

Further, the decision plays in to the hands of health insurers who routinely fail to disclose important policy details about restrictions and caps in complex product disclosure statements which are difficult for most people to understand, assuming they are given a copy of the document in the first place.  

Consumer groups have been quick to express their disappointment with the court’s decision with Consumers Health Forum saying that the dismissal was "cold comfort" for consumers who believe that they are buying "peace of mind" when they take out health insurance.   

This decision could have far reaching consequences for many consumers so it is even more important that the Senate Inquiry,Value and affordability of private health insurance and out-of-pocket medical costs, consider introducing legislative changes that will bring an end to such unconscionable behaviours by health insurers and usher in greater transparency for consumers.