Finding out that your health insurance claim has been denied can be both stressful and confusing. Unfortunately, this is an issue many Australians face, and it’s not always the result of something you did wrong. Sometimes it comes down to system errors, miscommunication, or misleading practices by insurers.
In recent years, one of Australia’s largest health funds admitted to incorrectly rejecting thousands of claims, leaving many people out of pocket for treatments that should have been covered. While refunds and penalties followed, the situation is a reminder that policyholders need to be proactive and informed when dealing with claim disputes.
So, what can you do if your claim is turned down and you believe it shouldn’t have been? Let’s break down the steps.
Why claims get knocked back
Health funds reject claims for a variety of reasons, and not all of them are legitimate. Some common causes include:
- Your policy specifically excluded the type of treatment you received.
- You hadn’t completed the required waiting period for a new or upgraded policy.
- Administrative or billing errors, such as the wrong Medicare item number being used.
- “Mixed claims,” where part of the treatment is covered but the entire claim is rejected.
The last issue was at the heart of the recent large-scale insurer case, where claims were declined even when some elements were eligible for payment.
Step 1: Revisit your policy
Start by reviewing your health insurance documents carefully. Check which category your treatment falls under and whether that category is covered, excluded, or restricted on your policy. Also confirm whether waiting periods apply, particularly for pre-existing conditions. Sometimes claims are rejected simply because of an overlooked detail in the paperwork.
Step 2: Request a clear explanation
If you still don’t understand why your claim was denied, ask your insurer to provide a written explanation. They must outline the reasons for their decision, including which part of your policy was applied and whether exclusions or waiting periods were involved. Having this documentation is crucial if you need to escalate the dispute. It’s also worth double-checking with your doctor or hospital to make sure the right item numbers and documents were submitted.
Step 3: Collect supporting evidence
Before lodging a complaint, gather all relevant paperwork. This could include your full policy statement, medical reports, discharge summaries, invoices, and correct Medicare item numbers. If you were given prior confirmation from your insurer that a procedure was covered, keep a record of that too. Evidence is key when challenging a decision.
Step 4: Lodge a formal complaint
If you believe the insurer is in the wrong, you can file a formal complaint directly with them. All private health insurers in Australia are required to have a complaints process in place, and most will respond within about 30 days. Submit your complaint in writing and include all evidence, clearly stating the outcome you’re seeking—whether that’s reassessment of the claim or reimbursement.
Step 5: Take it to the Ombudsman
If the response from your insurer isn’t satisfactory, the next step is to escalate the matter to the Commonwealth Ombudsman. This service is free, independent, and designed specifically to handle private health insurance complaints. The Ombudsman will review evidence from both sides and work to reach a fair resolution. Thousands of Australians use this service each year, and it’s especially effective in cases involving claim disputes.
If you’ve already paid out of pocket
In some cases, policyholders only realise later that their claim should have been approved. If you’ve already paid for treatment yourself, you can still follow the same process: request an explanation, lodge a complaint, and escalate if necessary. In situations where the insurer has admitted fault, you may be entitled to a refund or compensation.
The bigger picture
The fact that one of the country’s largest insurers was found to have mishandled claims for years shows how important it is to stay vigilant. Even if you trust your health fund, errors and systemic issues can occur. Regulators have emphasised the financial and emotional harm caused when people miss out on entitled benefits, and the message is clear: don’t accept a rejection without checking the details.
Being informed, organised, and willing to challenge an incorrect decision can save you thousands—and ensure you actually get the protection you’re paying for.
