Textile and graphic designer Amanda Magnano got the shock of her life in January when, at 43 years old, she was diagnosed with breast cancer, but there was another shock which soon followed.
Amanda and her fiancé Jen Tsen Kwok discovered that although they were paying $2,600 per annum for private health insurance, they would get absolutely no financial support from the insurer.
The couple are on NIB’s ‘Basic Hospital’ cover, a policy recently singled out as one of five so-called ‘junk’ policies, for offering cover for a very small number of procedures, by consumer affairs advocacy group CHOICE.
“After reading the online product information, I knew that some of it would be excluded, but to find out that we weren’t covered for any part of that diagnosis or the urgent surgery was particularly disappointing,” Kwok told The New Daily.
“To think that the term ‘Basic Hospital’ was so different from other basic health plans and so counter-intuitive to what you think it would mean”.
Kwok said that when the couple signed on the joint policy last year it was mentioned that they wouldn’t be covered for ‘cancer treatment’, but he said that what this actually meant was never explained in the initial phone conversation or in documents sent from NIB.
The couple said they only realised the exclusion of urgent cancer surgery and all incidental costs, including the hospital bed stay, only after talking with the NIB consultant on the phone after Amanda’s diagnosis.
He said the government’s standard information statement which contained a list of exclusions under ‘other services’ did not mention cancer.
“When you think ‘cancer treatment’ you think chemo and radiotherapy. This was urgent surgery to remove the cancer at the site,” said Kwok who himself had private health insurance with NIB for over a decade.
The surgery was deemed a Category 1 elective, which in the public health system meant they could wait four to six weeks for the surgery and knowing that the cancer was spreading day by day, they decided to go ahead with private surgery after finding out they wouldn’t be covered.
The couple ended up spending a total of $17,500 out of their own pocket and have since changed providers.
‘Our policy was clear’
A spokesperson from NIB said that while they couldn’t discuss the particulars of the individual case, the company’s labelling around what the policy covered was clear.
“Throughout the join process we clearly identify what benefits the customers receive and what they don’t receive. Using Basic Hospital, the attached web join screen clearly shows cancer is not covered under this product,” the spokesperson told The New Daily.
“We are constantly investigating ways to improve how we communicate with our customers. We recently introduced a new look policy statement which has been designed to clearly explain to our customers the value of health insurance and what their product includes.”
NIB is not the only private health provider to have concerns raised about the level of their coverage lately. The report by CHOICE, released last week also listed base level policies from Australian Unity, Defence Health, Medibank and Health Insurance Fund of Australia in its category of ‘junk’ policies.
“If you require reconstructive surgery after breast cancer, private hospital rehab after stroke, or heart surgery, these policies are useless. It’s ludicrous that consumers pay thousands to insurers for these poor-value policies to avoid government surcharges but have to turn to the public system when they get sick as their insurance is effectively useless,” Choice head of media Tom Godfrey said.
NIB rejected the report and told The New Daily premiums could rise if if a ‘one size fits all’ approach was adopted.
“Properly informed consumers should ultimately decide whether a product meets their objectives not the media, government, AMA or CHOICE magazine,” an NIB spokesperson told The New Daily.