2016 saw Bupa record a net surplus of $328.7 million, Medibank Private $317.7 million and HCF $153 million. Bupa sends its profit to its parent company in the UK. Medibank received government approval to increase its overall premiums by 6.59% from 1 April 2015 and another 5.64% from 1 April 2016. These are huge increases as inflation fell to under 2% per annum.
The figures indicate health insurance companies are growing profit at the expense of extras policyholders, with Medibank Private, Bupa, NIB and HCF each keeping over 22% of extras premiums, and paying out less than 78% to their extras policyholders in benefits. This compared with smaller mutual funds ACA, HPL, Navy Health and Defence Health, which skimmed only 5% to meet reasonable administrative expenses.
The ADA has launched a free comparison calculator to see if you are getting the best value for your health fund extras. While it is too complicated to advise for your particular circumstances and overall health needs, it gives a simple to use guide as to where your health fund sits in regards to dental extras. It also points out that you do not have to be covered for extras by the same company that overs you for hospital cover. If you feel your Health Fund has been misleading or unfair you can also lodge a complaint to the Ombudsman via the same link:
The ACCC launched Federal Court proceedings in 2016 against Medibank Private Ltd, alleging that it had engaged in misleading and unconscionable conduct by not telling policy holders that it no longer covered common hospital tests, including x-rays and blood tests.
Rising complaints against Medibank Private contributed significantly to a record 4416 complaints to the Private Health Insurance Ombudsman in 2015-2016.
The ACCC found that the growing number of changes to policies, as well as changes to benefits and the increasing number of policies with restrictions and exclusions confused consumers. This led to the Government Senate Inquiry suggesting reform. The ADA hoped for companies to have a ‘Gold, Silver or Bronze’ category to help consumers choose the best quality fund, and to have standardised definitions of Major Dental in Extras Cover. As at 2018 both of these items were dismissed and not legislated.