Medibank has topped the list of health funds that have shed the greatest number of members, according to a new report.
The Private Health Insurance Ombudsman’s latest State of the Health FundsReport shows that Medibank lost 45,676 customers between June 2015 and June 2016, followed by Westfund, which lost 865, and HCF, which said goodbye to 502.
The biggest winners from the exodus were HBF, which welcomed 49,949 new policyholders, Bupa, which won over 38,235, and NIB, which added 19,501.
The figures confirm Medibank had a tough 2016, with the Australian Competition and Consumer Commission accusing it of reducing coverage without notifying policyholders and an IT bungle that delayed the delivery of tax statements.
The Ombudsman received 4416 complaints, an increase of 3.5 per cent on the previous year’s figure.
The report also shows that despite having a market share of 27.6 per cent, Medibank accounted for 40.2 per cent of all complaints.
“Medibank is absolutely committed to delivering improved products and services for our customers and simply doing a better job for them,” its chief customer officer David Koczkar told Fairfax Media.
“Our share of Ombudsman complaints has fallen recently as a result of our investment in customer service and we remain focused on improving our customers’ experience.”
Overall, the industry experienced a growth of 1.35 per cent (86,939 memberships) in 2015-16.
However, confusing policies, annual premium increases of about 5 per cent, and concerns about “junk” policies have led to a declining rate in the take-up of health insurance.
Restricted membership funds, such as CBHS, Defence Health and Teachers Health, enjoyed membership increases of an average 6 per cent.
Gerard Fogarty, chairman of Members Own Health Funds, a group of 17 not-for-profit and mutual health funds, said while affordability was a growing concern, people valued insurance and searched for better deals.
He said Members Own recorded a 66.3 per cent growth in its share of the industry’s net growth in 2015-16, compared with 12 per cent for the big three – Medibank, Bupa, and HCF.
He said the growth was at the expense of the for-profit health funds.
“We know that the member-owned funds give more back to their members than the for-profits, and member-owned funds have much happier and satisfied members, and that’s shown by the amount of complaints compared to the market share,” said Mr Fogarty, also chief executive of Defence Health.
The Ombudsman’s figures have been released at the busiest time of the year for the industry, as people seek to switch funds ahead of the April 1 premium increase.
Premiums have consistently risen on April 1 for the past seven years. Of the big four health funds, NIB’s premiums have increased by 48.7 per cent since 2010, HCF 46.6 per cent, Medibank 45.3 per cent, and Bupa 43.7 per cent.
A survey by comparison website Finder found the average adult sticks with the same health fund for 11.8 years.
“As with other financial products, you should review your cover at least every 12 months because you could be missing out on the savings that typically come from shopping around,” said Finder’s Bessie Hassan. Savvy Consumer – Interact with us on FacebookLatest consumer affairs news
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