Medibank taken to court after allegedly “misleading” members about benefits

The Consumer Watchdog has launched court action against Medibank Private, accusing the health insurance giant of making “false representations” to more than 800 members.

According to the Australian Competition and Consumer Commission, Medibank falsely represented to members holding ahm “lite” or “boost” policies that they were not entitled to cover for joint investigations or reconstruction procedures, when in fact their policies covered these procedures.

“We will allege that Medibank incorrectly rejected claims or eligibility enquiries from over 800 members for benefits that they were entitled to and were paying for,” ACCC Chair Rod Sims said.


“As part of our case, we estimate about 60 members needlessly upgraded their policies so they could access the joint investigation and reconstruction procedures they were already entitled to under their existing, cheaper insurance policies.”

Mr Sims says Medibank’s alleged misrepresentations had serious consequences for members requiring procedures including spinal surgery, pelvic surgery, hip surgery and knee reconstructions.

“Some members were forced to delay surgery due to high out-of-pocket costs for these procedures and to seek alternative remedies to manage pain, when they were in fact entitled to insurance cover,” Mr Sims said.

The ACCC claims the alleged misrepresentations occurred between February 2013 to July 2018 for the ‘lite’ policies and from February 2017 to July 2018 for the ‘boost’ policies.

They also allege that Medibank “breached the Australian Consumer Law by failing to supply insurance cover for joint investigations and reconstructions, despite accepting payment from members for that cover.”

It’s understood Medibank self-reported the conduct to the ACCC and has begun compensating affected members.

The ACCC is seeking a range of penalties in the Federal Court.