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News, Business

NIB taken to court over hidden cuts to eye coverage

31/05/2017By Matthew Woodley
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The Australian Competition and Consumer Commission (ACCC) has launched legal action against NIB after it alleged the health insurer had engaged in unconscionable conduct in relation to the removal of certain eye procedures from one of its schemes.

The competition regulator has alleged NIB also contravened Australian Consumer Law by engaging in misleading or deceptive conduct and making false or misleading representations. The allegations centre on NIB’s failure to notify members in advance of its decision to remove the procedures from its “MediGap Scheme”, despite previously making assurances to do so.

It has also been alleged that between June 2011 and October 2016, NIB informed its members that several policies that covered eye procedures would not incur any out-of-pocket expenses, when in fact members could have been liable for such costs. According to the ACCC, NIB made this representation by paying gap amounts on behalf of members for these eye procedures prior to August 2015.

ACCC chairman Mr Rod Sims said consumers had a right to be informed of changes to their insurance cover in advance.

“These changes can result in very large financial consequences at a time when consumers are at their most vulnerable,” he said.

“Private health insurers must ensure their disclosure practices are in line with the Australian Consumer Law. Insurers should not expect consumers to bear the responsibility of making independent enquiries to find out about important changes made unilaterally by insurers.”

Further allegations centre on NIB’s supposed identification of more than 400 members who had received two or more eye procedures in the previous financial year, in circumstances where NIB’s management considered that it “probably ought to proactively communicate” with these members about the MediGap Change.

Additionally, after a doctor from Newcastle Eye Hospital sent a letter to his patients who were NIB members informing them of the MediGap Change and their right to move to another insurer, NIB contacted the hospital to request a commitment that its medical practitioners not communicate with NIB members or the media about the MediGap Change.

In response, NIB rejected the allegations made by the ACCC, saying it believes it has acted both lawfully and ethically.

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