Our role as an Industry Ombudsman includes: Private Health Insurance, Postal Industry, VET
Student Loans and the Overseas Students Ombudsman functions. In these functions we provide independent complaint-handling and resolution services for consumers, build industry capacity in complaint-handling and service delivery and also manage the privatehealth.gov.au consumer website, which is the leading source of independent consumer information about health
Private Health Insurance Ombudsman
As the Private Health Insurance Ombudsman our role is to protect the interests of consumers in relation to private health insurance. Our Office is an independent body that acts to resolve disputes about private health insurance at all levels within the private health industry. We also report and give advice to industry and government about these issues.
In 2018–19 we received 4,042 complaints, an 11 per cent decrease on the previous year’s total of 4,553. The number of private health insurance complaints received had increased significantly over the last decade and peaked in 2016–17, as shown in Figure 12.
The number of consumer information enquiries received relating to private health insurance increased by five per cent in 2018–19. We received 3,064 enquiries, of which 57 per cent were received through the consumer website privatehealth.gov.au.
Complaint-handling processes and categories
In 2018–19, 71 per cent of complaints were finalised as ‘assisted referrals’. In these cases we refer a complaint directly to a nominated representative of the insurer or service provider, on behalf of the complainant. Our assisted referral process ensures a quicker resolution of the complaint and client satisfaction survey responses show that complainants have a high satisfaction rate with this method of complaint resolution.
Eleven per cent of complaints were finalised through a ‘standard referral’—that is, the complainant received advice from our Office and then lodged their complaint directly with the appropriate body themselves.
Approximately six per cent of complaints were classified as ‘grievances’. These complaints are finalised by considering the issue and providing more information or a clearer explanation directly to the complainant, without the need to contact or seek additional information from the health insurer or health care provider.
Approximately 13 per cent of complaints were classified as ‘disputes’ (a slight decrease from 14 per cent in 2017–18). In these cases, we request a detailed report from the health insurer or other subject of the complaint.1 The report is then reviewed and a decision is made on whether the initial response was satisfactory or if further investigation is warranted.
Of disputes handled by our Office, 61 per cent were resolved by giving a more detailed explanation to the complainant, 16 per cent were resolved by a payment and 21 per cent by another satisfactory outcome (for example, backdating a change to a policy).
Client satisfaction survey
We carry out a fortnightly postal survey to a sample of complainants who have had their cases recently finalised. In 2018–19 we received 146 survey responses (27 per cent), a reasonable participation rate for a postal survey of this kind.
Overall, 89 per cent of complainants who responded were satisfied or very satisfied with the handling of their complaint, compared to 81 per cent in 2017–18. The results show that 83 per cent of survey respondents were happy with the time it took to resolve their complaints, compared to 78 per cent in the previous year.
Table 8—Complainant survey
Agreed that staff listened adequately
Satisfied with staff manner
Resolved complaint or provided adequate explanation
Thought PHIO acted independently
Would recommend PHIO to others
Happy with time taken to resolve complaint
Complaints about private health insurers
The following table shows the number of complaints and disputes received about registered private health insurers, compared to the insurers’ market shares. A higher ratio of complaints or disputes compared to market share can indicate an inadequate internal dispute resolution process, especially for complex issues, or underlying systemic or policy problems.
Table 9—2018–19 complaints and disputes about registered private health insurers
The following issues are the four most frequently raised issues in complaints received throughout2018–19.
The main issue of concern was hospital policies6 with unexpected exclusions and restrictions. Some basic and budget levels of hospital cover exclude or restrict services that many consumers assume are routine treatments or standard items. Delays in benefit payments and complaints about insurer rules that limited benefits also represented a significant proportion of complaints received.
Membership complaints typically involved policy administration issues, such as processing cancellations or payment of premium arrears. Delays in providing clearance certificates when transferring between health insurers was also a major cause of complaint.
Service issues are not usually the sole reason for complaints. A combination of unsatisfactory customer service, untimely responses to simple issues, and poor internal escalation processes can cause policy-holders to grow increasingly aggrieved and dissatisfied with their dealings with the insurer, until the service itself becomes a cause of complaint as well as the original issue.
Information complaints usually arise because of disputes or misunderstandings about verbal or written information provided by an insurer. Verbal advice is the cause for more complaints than any other information issue. It can be particularly complex if the insurer has not kept a clear record or call recording of interactions with the complainant.
Table 11—Complaint issues
Accident and emergency
Delay in payment
Gap - Hospital
Gap - Medical
General treatment (extras/ ancillary)
High cost drugs
Hospital exclusion/ restriction
Non-health insurance - overseas benefits
Non-recognised other practitioner
Out of pocket not elsewhere covered
Out of time
Preferred provider schemes
Preferred provider schemes
Second tier default benefit
Lifetime Health Cover
Medicare Levy Surcharge
Rebate tiers and surcharge changes
Brochures and websites
Lack of notification
Radio and television
Standard information Statement
INFORMED FINANCIAL CONSENT
Authority over membership
Rate and benefit protection
Acute care and type C certificates
Complaint not elsewhere covered
Confidentiality and privacy
Demutualisation/ sale of health insurers
Non-English speaking background
Private patient election
Customer service advice
General service issues
Premium payment problems
Benefit limitation period
A complainant was told by a medical specialist that their child needed elective surgery. They had purchased hospital cover from a health insurer less than 12 months earlier. They called the insurer to check whether the costs associated with the surgery would be covered. Based on the verbal information from the insurer, they booked the surgery for their child.
The complainant used family’s savings to pay for the procedure and made a claim with the insurer for reimbursement. Two weeks later, the insurer told them that the claim could not be paid. They explained that an independent medical advisor had assessed their child’s condition to be pre-existing.
The complainant came to our Office for help. We contacted the insurer and asked for copies of all communication with the complainant. We found that the insurer had told them not to worry about the preexisting conditions (PEC) process because the surgery was a ‘standard procedure’. It was only three months before the end of the PEC waiting period when they said this to the complainant.
The PEC process requires an assessment by a medical practitioner appointed by the health insurer. Insurers can impose a 12 month waiting period on benefits for hospital treatment for a PEC. If the insurer had properly explained the PEC process and how pre-existing conditions are defined, the complainant may have delayed the surgery until the waiting period was finished. We asked the insurer to consider this issue and they agreed to pay the hospital costs because they had not given adequate information.
A complainant started a health insurance policy in June. A government rebate was automatically applied to their policy, reducing their premium. The insurer asked them to complete a rebate form to confirm the reduced premium. The complainant thought they had returned the form, and did not hear anything more about it.
In late October, the insurer again asked the complainant to complete a rebate form. The
complainant thought they returned the form a second time. Ten days later the insurer wrote
to the complainant asking for the rebate form or else their premium would increase from their
start date. Six days later, the insurer wrote to the complainant, saying that their premium had
increased from June because their rebate had been removed. The letter went on to explain
that they were now in arrears.
The complainant was not in good health and was receiving medical treatment. They contacted our Office and asked us to help. The first insurer gave us their records of communication with and admitted they should not have allowed five months to pass before following up on the rebate form. The first insurer offered to accept 50 per cent of the arrears and to issue a new end date certificate so the second insurer could remove the waiting periods on the complainant’s new policy.
Overseas Visitors Health Cover
Each year we help people with complaints about Overseas Visitors Health Cover (OVHC) and Overseas Student Health Cover (OSHC) policies for visitors to Australia. These complaints are counted separately from complaints made about domestic health insurance policies. In 2018–19 we received 404 overseas health cover complaints.
The most common issues for overseas visitors were complaints about the pre-existing condition waiting period (117 complaints), cancellation (52 complaints) and benefit payment delays (26 complaints).
Table 12—Overseas Visitors Health Cover complaints
Allianz (Lysaght Peoplecare)
Medibank Private (AHM)
During the year, the Office publishes quarterly bulletins which report on complaint statistics, issues and trends.7 The bulletins also include information on topics such as the private health insurance reforms and premium increases.
The State of the Health Funds Report, relating to the 2017–18 financial year, was published in March 2019. 8Section 20D(c) of the Ombudsman Act 1976 requires that the Office publishes the report after the end of each financial year, to give comparative information on the performance and service delivery of all health insurers during that financial year. The purpose of this report is to provide consumers information to help them make decisions about private health insurance.
To supplement the information in this report, additional information about private health insurance complaint statistics and trends in 2018–19 will be published on the Office’s website.9
The website privatehealth.gov.au is Australia’s leading independent source of consumer information about private health insurance. It is also the only website that allows users to search the features and premium costs of every policy available in Australia.
In 2018–19 we received 1,740 enquiries via the consumer website, which we responded to with written information and advice.
Website usage has continued to grow every year since the website’s original launch in 2007, with 1,441,712 visits in 2018–19—an increase of over nine per cent compared to the previous financial year.
On 1 April 2019, the Office launched an updated version of its privatehealth.gov.au website. The website includes the following new features:
Information about the government’s private health insurance reforms, including new product tiers for hospital policies (Gold, Silver, Bronze and Basic).
An improved search feature for comparing policies that allows users to filter results based on the services they are most interested in, or the premium they are prepared to pay. Search results are displayed in a vertical ‘tile’ format, allowing users to compare policies side-by-side.
A simpler Private Health Information Statement (PHIS), which summarises the most important features of the policy. Users can download, print or email copies of the PHIS to consider the information at a time that suits them.
A new premium estimator so users can decide whether to compare policies according to the base premiums or an estimated premium,which takes into account their rebate and/or Lifetime Health Cover (LHC) loading.
An updated look and feel, including compatibility with mobile devices.
Improvements to existing features such as the agreement hospitals finder, which shows what hospitals are covered by each insurer.
During the transition period for the private health insurance reforms from 1 April 2019 to 1 April 2020, health insurers will gradually transfer existing policies across to the new product tiers. The website will continue to include all available policies, as health insurers are required to keep their information on the privatehealth.gov.au up-to-date at all times.
Postal Industry Ombudsman
The Office investigates complaints about postal and similar services provided by Australia Post and Private Postal Operators (PPOs) under the Postal Industry Ombudsman (PIO) Scheme.
Australia Post (including StarTrack) is a mandatory member of the PIO Scheme, while other PPOs may choose to voluntarily register. As at 30 June 2019, there were three voluntary members on the Private Postal Operator Register: FedEx Australia, Cheque-Mates and D and D Mailing Services.
In 2018–19 we received 2,503 complaints representing a 30 per cent decrease in comparison to complaints received in 2017–18 (3,55310).
Table 13—PIO complaints received and finalised in 2018–19
In 2018–19 complaints about loss, delivery issues and delay continued to generate the significant majority of complaints to our Office.
Some outcomes achieved from the actions we took in 2018–19 included:
faster resolution of complaints through the new complaint transfer process
further explanation by our Office and postal operators
apologies to individuals from the postal operator
financial remedies including compensation, refunds, goodwill payments and in-kind services
feedback to postal operator staff.
During 2018–19 we introduced a new process for transferring complaints to Australia Post when we assessed that Australia Post should be able to resolve the matter quickly with the customer. For these cases, Australia Post assess the complaint and informs us of the outcome. We then consider if further investigation of the complaint is required.
We transferred around 20 per cent of complaints via this process for this year, which has proven an effective way to provide timely resolutions for postal complaints. This process has also reduced the number of detailed investigations required by the Office.
This year we conducted a review of Australia Post’s implementation of recommendations made in the own motion report Review of Australia Post complaints about carding, Safe Drop and compensation. 12The report made six recommendations to Australia Post highlighting areas where performance could be improved.
Our review concluded that Australia Post has made significant progress in addressing the report recommendations. We also noted the number of actions already underway will take time to implement and we will continue to work with Australia Post as the implementation process continues. Full details are in the report published on 14 June 2019.13
There were no occasions where a complaint or part of a complaint was transferred from the Postal Industry Ombudsman to the Commonwealth Ombudsman under subsection 19N (3) of the Ombudsman Act.
The Postal Industry Ombudsman made no reports during the year under s 19V of the Ombudsman Act.
A complainant sent a box containing 12 bottles of wine overseas through Australia Post and purchased Extra Cover in case of damage. Some of the bottles were damaged in transit and a damage claim was made. Australia Post rejected the Extra Cover claim on the basis that the article was inadequately packaged and did not have a wine certificate (a requirement when sending more than 2 bottles).
The complainant complained on the basis that the Post Office knew at time of lodgment that the box contained wine and how it was packaged. Australia Post did not mention anything about a wine certificate and sold them Extra Cover. Australia Post did not change its decision so the complainant approached our Office.
We transferred the dispute back to Australia Post to respond to the complainant’s concerns. Australia Post acknowledged that it should have identified that the article should not have been accepted for carriage as only two bottles of wine can be posted, additional amounts require a wine certificate and alcohol deliveries were also on the prohibited list for the country the box was addressed to.
Australia Post offered the complainant compensation to cover the damage and postage.
VET Student Loans Ombudsman
Our Office investigates disputes between students and their Vocational Education and Training (VET) loan scheme providers under the VET Student Loans Ombudsman function.
We also deliver best practice complaint-handling advice and training to VET loan scheme providers to help improve their ability to manage complaints, which results in better outcomes for students and providers.
If required, we have powers to compel VET loan scheme providers to attend meetings and we can make recommendations to other Australian Government agencies in relation to systemic issues about provider practices uncovered through our investigations.
New VET FEE-HELP redress measures
From 1 January 2019, we began assessments of VET FEE-HELP debts under the VET FEE-HELP Student Redress Measures. The redress measures, passed in the Higher Education Support Amendment (VET FEE-HELP Student Protection) Act 2018, provide people who incurred VET FEE-HELP debts inappropriately with an opportunity to have their debts assessed for removal by our Office. People who want to have their debts considered under the redress measures must make a complaint to our Office. We then assess the debt and make a recommendation to the Department of Education and Training (DET) to remove the debt in full or in part. The Secretary of the DET or their delegate then makes a decision after reviewing our recommendation. The Secretary of the department can also act on their own initiative to remove the debts of groups of students who experienced inappropriate conduct in a similar way, even if those students have not lodged a complaint with the Office.
During 2018–19, we worked closely with DET to document and agree processes to support the assessment of complaints and submission of recommendations under the redress measures. During 1 January–30 June 2019 we focussed on the quality of recommendations rather than the volume, to ensure our recommendations were well-targeted and that debt removals were justified. As the bedding down of processes is largely complete we expect the volume of recommendations to increase in 2019–20.
As at 30 June 2019, there were 5,912 open complaints that require assessment under the redress measures by our Office.
As at 30 June 2019, we had made 515 recommendations to the department for the removal of VET FEE-HELP under the redress measures, comprising 3,486 units of study, with a total value of $12.2 million, including $10.2 million in loan debts and $2 million in loan fees. In addition, we finalised 158 complaints following the department’s removal of 4,094 student debts under its first Secretary Initiated Action in April 2019.
Following machinery of government changes, we will continue to work closely with the Department of Employment, Skills, Small and Family Business on the VET FEE-HELP Redress Measures.
In 2018–19 we received 7,059 complaints from students disputing their debts or other issues with their VET loan scheme provider and finalised 4,632. Unknown debts and enrolments were the most common complaint issues raised, accounting for 19 per cent of complaints received in 2018–19.
In January 2019, we revisited complaints closed during 1 July 2017–31 December 2018 that are now eligible for consideration under the redress measures. We identified 793 complaints to be eligible and subsequently re-opened these complaints for assessment under the redress measures.
Table 14 shows the finalisation reasons for complaint issues. Complaints often include more than one issue, which is why there are more issues (7,871) than finalised complaints (4,632). The main reason for finalising complaints in 2018–19 was due to complainants not going through their providers’ internal complaints and grievance policy in the first instance.
Table 14—Issue outcomes for finalised complaints in 2018–19
Total issue number
The complainant has not yet followed the provider’s complaint-handling or grievance procedures
Not all circumstances warrant investigation, so no investigation was commenced. This includes when:
an action was reasonably open to a provider to take
a complainant is referred to a tuition assurance operator to seek redress
a provider has agreed to re-credit a complainant’s student loan.
This also includes when the complainant is not sufficiently connected to the complaint, such as when a person calls on behalf of another person without their knowledge or consent
After commencing an investigation or further assessment of a complaint, we decided that further investigation or action was not warranted for an reason. This includes when:
A provider has provided an appropriate remedy.
Further investigation would not lead to a different result.
We have made a recommendation for re-credit under the redress measures which has been accepted by the department. We finalise complaints after the department makes a decision on our recommendations. As at 30 June 2019, we had finalised 276 complaints after making a recommendation and 239 complaints where we had made recommendations which remained open pending a decision by the department.
The complainant cannot be contacted, does not respond to requests for information, or does not wish to pursue their complaint.
The complaint would be better dealt with through an external avenue such as the department or the Administrative Appeals Tribunal (AAT), or the complainant was referred to an advice or advocacy body.
Complaints relating to the VET Student Loans program
During 2018–19, we received 194 complaints relating to the VET Student Loans program, compared to 86 complaints received about the program in 2017–18.
The most common issues raised in complaints about the VET Student Loans program relate to course closures, loan amount disputes and course progression. As at 30 June 2019, 72 complaints about the program remained open and four were being investigated. A significant proportion of complaints about the program (56.8 per cent), were finalised by referral back to the provider for the complainant to go through the provider’s internal complaint process.
We publish quarterly updates for the VET Student Loans Ombudsman function, which provide detailed data and analysis of complaints and issues handled by our Office. These updates are published on our website: ombudsman.gov.au/publications
Overseas Students Ombudsman
The Office of the Commonwealth Ombudsman investigates complaints from prospective, current and former international students about problems with private education providers.
We have three main functions in our Overseas Students Ombudsman role. They are to:
assess and investigate complaints about actions taken by private registered education providers in connection with student visa holders
give private registered providers advice and training about best practice complaint-handling for international student complaints
report on trends and systemic issues arising from our complaint investigations.
In 2018–19 we received 1,324 complaints and finalised 1,292, this represented a 32.5 per cent increase in complaints received compared to 2017–18. The increase in complaints received by our Office reflects an increase in the outreach activities undertaken by the Office during the year.
Quarterly updates are published for the Overseas Students Ombudsman function which provide detailed data and analysis of complaints and issues handled by our Office. These updates can be found on our website at ombudsman.gov.au/publications
Assisted referrals process
We usually do not investigate a complaint before a student has made a formal internal complaint or appeal to their education provider. This gives the education provider an opportunity to resolve the matter first.
Students who have not yet complained to their provider make up 17 per cent of complaints to our Office. To assist these students to make complaints to the provider in the first instance, and to achieve an early resolution of complaints, we commenced a trial process of assisted referrals of complaints to education providers in January 2019.
This process helps to ensure that the education provider and the student have an opportunity to resolve the issue. If the education provider informs us that the complaint has been resolved, but the student advises that they are not satisfied with the provider’s resolution, our Office may start an investigation. If the education provider does not assist the student by initiating the provider’s internal complaints and appeals process, our Office may also begin an investigation.
Providers are not obliged to participate in the assisted referral process, but we appreciate the cooperation of education providers who have participated in this new process and worked with students to promptly resolve their complaints.
During 2018–19, we commenced 402 investigations and finalised 366 investigations which included 467 issues.14 Table 15 shows which party our investigation outcome supported for all complaints finalised during the period.
Table 15—Issue outcomes for investigations finalised in 2018–19
Party investigation outcome supported
Table 15 shows that 19 per cent of issue investigation outcomes were found in support of neither the student nor the provider. This can be for the following reasons:
the issue was not investigated, even though other issues complained about were investigated
the issue was resolved between the student and provider during the course of the investigation
the investigation of that issue stopped before a determination could be made, for example, because the complainant withdrew their complaint or the issue was transferred to another complaint-handling body which specialises in handling complaints on those issues.
Written agreements (fees and refunds) continue to be the most common complaint issue we receive from overseas students. These complaints are usually about students seeking a refund of pre-paid tuition fees when they have ended their study before finishing their course. Students’ ability to seek this refund should be stated in their written agreement with the provider. Student attendance and course progress monitoring, and transfers between registered providers were the next most common issues raised in complaints to our Office.
Complaints by education sector
The Vocational Education and Training (VET) sector continues to be the most commonly complained about sector. However, it also has the highest number of registered private providers.
Over 70 per cent of international students use the services of an education agent when seeking to study in Australia.15 As a result, education agents play an important role in informing students about their rights and helping students to make a complaint if they have a dispute with their provider. Education agents can even lodge a complaint with us on behalf of a student they are assisting.
In 2018–19 we commenced a strategy to engage with education agents to increase awareness of the Office and to improve our outreach to international students studying in Australia. The aim of the strategy is to educate agents about the Overseas Students Ombudsman, including how to refer students to our Office to make a complaint and the resources we have available for agents and students.
As part of the strategy we implemented a newsletter, which is sent to nearly 5,000 qualified education agent counsellors, providing updates about the Office and useful information for agents about the complaint-handling process. We also attended the ICEF Australia New Zealand Agent Workshop 2019 in Darwin. At this workshop we presented a seminar on our role and participated in a series of one-on-one meetings with agents.
Conferences and forums
During 2018–19, representatives from the Office presented at or participated in the following events:
Victorian International Student conference
Australian Council for Private Education and Training (ACPET) annual conference
Education Consultants Association of Australia, ESOS and National Code seminar
SYMPLED – Symposium on Leading Education recruitment
Chairs of Academic Boards Forum (for non-university higher education providers)
Migration Institute of Australia, Professional Development session
Australian Education Consultants’ Alliance national conference
Study Canberra, International Student Ambassador training
Council of International Students Australia (CISA) grievance officer training
Best Practice Complaint-Handling session, Victorian VET provider
Australian Federation of International Students (AFIS) welcome day
ICEF Australia New Zealand Agent Event
The Office has held regular meetings with the national education and training regulators, the Australian Skills Quality Authority and the Tertiary Education Quality Standards Agency, as well as the Tuition Protection Service, Department of Education and Training and the Department of Home Affairs to discuss issues relating to international education and overseas student complaints.
Representatives from our Office organized and chaired regular meetings with a network of ombudsmen and similar overseas student complaint-handling bodies with the intention of producing a national international student complaints data summary in 2019–20.
Reports to the regulators
The Office may, under s 35A of the Ombudsman Act 1976, disclose information of concern about a provider’s actions to the relevant government regulator if in the public interest. In 2018–19 the Office made disclosures in relation to nine providers.
Eight disclosures were made to the Australia Skills Quality Authority. The disclosures concerned, serious and/or repeated breaches of the Education Services for Overseas Students (ESOS) legislative framework.
Five disclosures were made to the Tuition Protection Service, the NSW Board of Education, and the Department of Education. The disclosures concerned, providers not issuing refunds to students who had their visa refused, within the 28 day period mandated by the ESOS Act.
Section 9 powers
We did not use our s 9 powers under the Act to obtain information or documents in 2018–19.
Hospital, medical or other practitioner or health insurance broker. ↩
Table 10—(Complaints) Number of complaints about insurers and providers ↩
Table 10—(Disputes) Number of complaints about insurers and providers ↩
Table 10—(Market share) Number of complaints about insurers and providers ↩
Other includes complaints about legislation, ambulance services, industry peak bodies, and general complaints about private health insurance. ↩
Hospital policy is private health insurance that covers costs incurred by a private patient in hospital. ↩
The 2017–18 Annual Report at page 77, quoted 3,790 PIO complaints which included 237 complaints about administrative actions and decisions taken by Australia Post, which were considered under the Commonwealth Ombudsman jurisdiction. ↩
Not all complaints are finalised in the same year they are received. ↩
A single complaint can have more than one issue, which is why there are more issues than investigations. ↩
Department of Education and Training, submission to the Joint Standing Committee on Migration’s Inquiry into the efficacy of current regulation of Australian migration agents, Table 1. Accessed 22 May 2019 from the website of Australian Parliament House. ↩