Medibank has moved to refute claims by the Australian Competition and Consumer Commission (ACCC).
Corporate watchdog ACCC has started proceedings in the federal court against Medibank for “misleading and unconscionable conduct”.
The ACCC said the private health insurance provider failed to notify members about its decision to limit benefits for in-hospital pathology and radiology services.
It claims Medibank relied on the high likelihood members incorrectly assumed their in-hospital expenses were covered.
“Consumers are entitled to expect that they will be informed in advance of important changes to their private health insurance cover, as these changes can have significant financial consequences at a time when consumers may be vulnerable,” ACCC chairman Rod Sims says.
“Private health insurers must ensure their disclosure practices comply with the Australian consumer law. Competition and consumer issues in the health and medical sectors are a current enforcement priority for the ACCC.”
The allegations also state Medibank calculated there was a risk that if the change was disclosed, members would leave the insurer, damaging Medibank's brand and reputation and negatively impacting its IPO.
Medibank said to members they would not have to pay any out-of-pocket for services unless notified, which ACCC said became false from September 2014 after the private health care insurer phased out agreements.
ACCC claims Medibank ahm members have had to pay the gap for in-hospital pathology and radiology services.
The ACCC is seeking declarations, injunctions, compensation orders, pecuniary penalties, findings of fact, implementation of a trade practices compliance program, corrective notices and costs.
Medibank has responded to the claims saying it refutes claims by the ACCC and is committed to acting in the best interests of its members.
"Medibank takes its obligations under the Australian Consumer Law seriously, and has appropriate processes in place to ensure compliance," Medibank said in a statement.
In February of this year, Medibank launched a multimillion dollar campaign celebrating health cover for every type of family. See the clip below.
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