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Health insurance giant Bupa has admitted it has misled thousands of customers about their entitlements for more than five years, leading some to forgo medical treatments and leaving others out of pocket by thousands of dollars.
The health insurer agreed to pay $35 million in penalties in response to legal action from the consumer watchdog over its practices, the Australian Competition and Consumer Commission said in a statement on Monday.
“Bupa’s conduct is very serious and fell well short of what is expected of one of the largest health insurers in Australia,” ACCC chair Gina Cass-Gottlieb said.
Bupa has admitted to misleading thousands of customers over five years.Credit: Natalie Boog
The ACCC has launched proceedings against the insurer in the Federal Court, alleging it breached consumer law by engaging in misleading or deceptive conduct, making false or misleading representations to its customers and engaging in unconscionable conduct in assessing mixed coverage claims.
Bupa has conceded to the watchdog that at various times between May 2018 and August 2023, it told customers they weren’t entitled to benefits for so-called mixed coverage claims and uncategorised item claims when, in fact, they were.
The ACCC said most of the cases involved claims for hospital treatments, in which two or more procedures were performed at the same time. “In cases where part of the treatment was covered by a member’s policy and part of the treatment was not covered, Bupa incorrectly rejected the entire claim,” it found.
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The misrepresentations occurred both before procedures, when customers were checking what their insurance coverage would be, and in the aftermath.
Bupa’s actions left some customers out-of-pocket to the tune of thousands of dollars, and led them to either personally pay for treatments for which they should have been covered or upgrade to more expensive policies, the watchdog said. Some customers decided not to proceed with treatments at all due to the costs, which led to health risks including further complications, physical pain and distress, it claims.
The ACCC and Bupa agreed to jointly ask the Federal Court to impose the $35 million penalty, as well as make other orders including an undertaking to continue its remediation program. The insurer has begun compensating affected members, hospitals and medical providers, and has so far paid out $14.3 million in compensation on more than 4000 claims.
“This should never have happened,” said Bupa chief executive Nick Stone. “We are deeply sorry for failing to get things right for our customers and are saddened by the impact this has had on them and their families.”
The ACCC’s Cass-Gottlieb said Bupa’s conduct “affected thousands of members [...] and caused harm to consumers, some of whom delayed, cancelled or went without treatment for which they were, at least partially, covered under their health insurance policies”.
“Consumers purchase private health insurance to provide peace of mind, certainty of coverage and the ability to choose where and when to undertake their procedures.”
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