The Australian Competition and Consumer Commission started proceedings in the federal court against Medibank Pvt. Ltd. over allegations that the insurer violated the country's consumer law through making false representations about benefits covered by its health insurance policies.
The regulator said Medibank, which trades as ahm Health Insurance, falsely represented to members making claims or inquiries that their "lite" or "boost" policies did not cover joint investigations or reconstruction procedures. The insurer incorrectly rejected claims or eligibility inquiries from more than 800 members, ACCC Chair Rod Sims said.
There were about 60 members who upgraded their policies to gain access to joint investigation and reconstruction policies without knowing that they were already entitled to these procedures under their existing policies.
Medibank self-reported the conduct to the commission and has started compensating affected customers. The Australian Competition and Consumer Commission's proceedings include alleged misrepresentations connected to "lite" policies from February 2013 to July 2018 and "boost" policies from February 2017 to July 2018.
Additionally, the regulator claims that Medibank breached the Australian consumer law through its failure to supply insurance cover for joint investigations and reconstructions although it accepted payments for that cover. It is seeking penalties, consumer redress, declarations, injunctions, publication orders, the implementation of a compliance program and costs.
Medibank senior executive Jan O'Keefe apologized to affected customers and reassured that the insurer has reviewed its process for developing and managing products to ensure that the issue does not happen again. He said the insurer has notified all customers about the issue and encouraged affected customers to reach out.
"While this matter is before the federal court I need to respect the process and am unable to make any further comments about the case until the proceedings are complete," O'Keefe said in a news release.
