NIB holdings decided to not tell elderly members who had eye operations that the health insurer wasn’t going to cover that procedure in full anymore, the consumer watchdog the ACCC (Australian Competition and Consumer Commission) has alleged.
The insurer now faces proceedings in the Federal Court for failing to communicate the changes made to its MediGap Scheme to customers.
A short time ago, NIB shares were down 5.5% to $5.09.
In a statement, NIB rejects the position being taken by the ACCC, saying it and believes it acted lawfully and ethically.
The ACCC alleges that NIB represented to members that several of its policies covered eye procedures and members would not pay any out-of-pocket expenses when in fact they could incur out-of-pocket costs.
Patients who receive these eye procedures were often elderly and needed them regularly to prevent loss of eyesight.
The ACCC says a doctor at Newcastle Eye Hospital sent a letter to his patients who were NIB members informing them of the MediGap change.
NIB then contacted the hospital to request a commitment that its medical practitioners not communicate with NIB members or the media about the MediGap change, says the ACCC.
“Consumers have a right to be informed of important changes to their insurance cover in advance, as these changes can result in very large financial consequences at a time when consumers are at their most vulnerable,” says ACCC chairman Rod Sims.
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