Australian consumers are baffled about private health insurance and are increasingly at risk of out-of-pocket expenses.
The consumer watchdog's latest report on the sector says Australians often have an exaggerated perception of what their health insurance policies will cover.
The Australian Competition and Consumer Commission has also pointed to misleading advertising and other claims that may breach consumer laws, particularly for budget policies that are heavy on exclusions.
The ACCC has warned insurers of a crackdown on misleading conduct, including bold advertising claims such as "no gap" or "100% cover" when the fine print reveals significant qualifications apply.
It's also concerned about the use of industry terms and phrases that bear little resemblance to consumers' understanding of commonly used words.
And it warns of "incomplete information that creates the representation that there is broader insurance cover than the consumer has".
The watchdog says it's little wonder consumers are confused, given the use of complicated terms and conditions, exclusions and practices that make it difficult for them to meaningfully compare rival products.
It's raised particular concerns about budget policies aimed at consumers seeking to avoid the Medicare levy surcharge that applies to taxpayers who fail to take out private cover.
While price is a legitimate concern, the watchdog says many people fail to understand what they are giving up by shifting to cheaper policies.
"Consumers are finding themselves more often without the cover they expected," it says.
The ACCC wants the government to review what is required of standard information statements that accompany policies, so they can help consumers compare rival products.
It says the language used to promote health insurance products should also be standardised, particularly descriptors for levels of coverage and specific procedures.
It says the government website www.privatehealth.gov.au is the one place where all private health insurance policies can be compared and more money should be spent improving it.
