Government investigates ‘price gouging’ by insurers 

The government has announced it will investigate health insurers for using a loophole to raise their prices.  

In December last year, Minister of Health Mark Butler warned health insurers to stop ‘phoenixing’ policies after a Commonwealth Ombudsman report brought the practice to light. By law, health insurers can only raise prices once a year, but a loophole called phoenixing enables them to close policies to new customers, then create almost identical policies at a higher price. At the time, Mr Butler described this as “price gouging”. 

This week, information shared with the ABC has found insurers have continued phoenixing policies. HCF reportedly closed a Gold policy to new customers then created a similar policy costing 35% more – jumping from $343 a month for Hospital Cover in NSW, to $456 per month for Combined Hospital and Extras Cover.  

“I will not tolerate this shameful phoenixing tactic from private health insurers,” Mr Butler told the ABC. 

“I have asked for this action from HCF to be urgently investigated by the Department of Health. If it is confirmed, then I will take action to protect customers and stop this happening again.” 

Read the ABC story here. 

Trudie McConnochie

Writer and Researcher

Knowledge is power – that’s the guiding principle behind everything Trudie writes, and it’s a philosophy she brings to her work at healthslips.com.au. By breaking down complex information into easy-to-understand blogs and stories, she aims to empower Australians to make the best choices and an informed decision around private health insurance.

Trudie understands firsthand some of the complexity of private health insurance having moved to Australia from New Zealand and having to navigate a vastly different public healthcare system and health insurance structure.

Trudie holds a Bachelor of Communication Studies (journalism major) from the Auckland University of Technology.

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