Medibank Private Health Insurance Review: Features, Pros & Cons

Medibank was founded in 1976 as a non-for-profit, government-owned insurer. It became for-profit in 2009 and was listed on the ASX as a publicly-traded company in 2014, where it remains today. Medibank says it has more than 4 million customers and occupies a 27.1% market share of the total health insurance pool in Australia, making it the nation’s largest health insurer.

However, due to the 2022 Medibank cyber attack–in which more than nine million current and former customers’ private data and health records were accessed and released on the dark web–Medibank has suffered widespread reputational damage. Unsurprisingly, the cyber attack has led to an influx of negative reviews for Medibank on Australia’s largest consumer opinion site, Product Review, with Medibank scoring an average of 1.4 stars from more than 1,000 reviews.

Further details of the cyber attack can be found at the end of this review. First, let’s explore what Medibank covers as a health insurer.

Medibank offers a variety of health insurance plans, including cover for singles, couples, families and single parents. From there, consumers can choose to take out hospital-only cover, extras-only cover, or a plan that covers both hospital and extras–with varying amounts of excess and differing levels of inclusions, such as ‘Bronze Everyday’ or ‘Gold Complete’.

Most Medibank hospital policies includes ambulance services and cover for accidents, while the majority of options for extras cover includes general dental, physiotherapy and optical. Higher premium plans offer more specific coverage, such as hospital cover for chemotherapy or joint reconstructions, and extras cover for speech therapy or orthodontics.

Medibank has a returned benefits percentage of 83.4%, which represents the percentage of premium contributions that are returned to members as benefits, and a member retention rate of 86.9% on its hospital-only plans.

Wait Time

All health funds have waiting periods, which is the length of time before you can claim benefits.

At Medibank, most services have a wait time of two months, but for optical and the ultra bonus for out-of-pocket expenses, it’s six months. Pre-existing conditions attract a wait time of 12 months, which is not uncommon in the industry.

It also has a 12-month waiting period for obstetrics-related services, major dental services and breathing appliances and there is a 24-month wait for blood glucose monitors, and a 36-month wait for hearing aids and laser eye surgery.

Mind the Gap

A ‘no gap policy’ is one in which your insurer covers 100% of the cost—there is no gap, in other words, between what the insurer will cover and what the medical professional charges you. At Medibank, 83.8% of all non-hospital medical services incur no-gap payable by the patient as an average percentage across all policy types. Meanwhile, 90% of hospital charges are covered in full, while 52.6% of extras treatments are fully covered. It is not uncommon for around only 50% of extras to be covered.

Medibank has two options that include cover for the hospital:its hospital-only policy or its hospital and extras cover. If you choose either of these options, you will be covered for the hospital to varying degrees, depending on the level of coverage you select.

Data shows that out of all of the hospital-related charges claimed by members to Medibank nationwide, 90% were covered by the health insurer.

What About Dental, Physiotherapy or Optical?

Medibank will only cover you for certain extras if you take out one of their extras policies, either  extras only or the hospital and extras cover.

All extras policies offer cover for general dental, physiotherapy and optical. However, it does not include more complex and major dental, such as root canal treatment or dental implants.

Additionally, in order to claim general dental, physiotherapy, or optical treatments, Medibank customers must attend Medibank-specified ‘Members’ Choice’ providers–which are not available in all areas.

Medibank customers can search for Members’ Choice providers near them by using the ‘Find a provider’ tool online.

Further Discounts?

Medibank often runs further discounts and sign-up incentives for new members. At the time of writing in October 2024, Medibank Private was offering new sign-ups a $50 gift card via their Live Better rewards program and the waiving of two and six-month waiting periods on extras.

Of all complaints investigated by the Ombudsman across all insurers, 29.9% have been complaints in regards to Medibank—slightly more than their market share. Of these, some 19.2% were investigated by the Ombudsman.

The Commonwealth Ombudsman explains online that it investigates complaints about actions and decisions of agencies to “see if they are wrong, unjust, unlawful, discriminatory or just plain unfair”.

“The Ombudsman also seeks remedies for those affected by administrative deficiency, and acts to improve public administration generally,” its states.

When it comes to health insurance, complaints must be about a health insurance arrangement. Where an insurer’s share of complaints investigated by the Ombudsman is higher than its market share, it indicates that members of that insurer are more likely to complain than those of other similar-sized insurers.

Medibank Data Breach

Medibank fell victim to a cybersecurity incident on October 12, 2022, when “unusual activity” was detected on Medibank’s internal systems.

The company swiftly released a statement that said there was “no evidence that customer data has been accessed” during the breach; by October 18, 2022, it was clear that hackers had accessed 200GB of personal customer data.

On October 20 of the year, Medibank released an update confirming that the Australian Federal Police was investigating the breach as a cyber crime, with the data leaked including personal identification and documentation data as well as health claims, diagnoses and procedure information.

In exchange for the data, the hackers requested $15 million ransom to be paid by Medicare, which the company refused to pay.

Beginning November 9, the hackers released the private data of Medicare customers on the dark web.

“Given the nature of the stolen data that the criminal continues to release on a dark web forum we are in the process of contacting customers, and we urge our customers to reach out for support,” Medicare stated on November 14.

Medibank offers customer service on Saturdays from 9am-4pm and during the week from 8am-8pm. It also has a live chat function via its website.

In the days and weeks following Medibank’s cyber attack, many customers expressed disappointment in the health insurer for not contacting them personally after their data was released on the web. More recently, reviews on Product Review have spoken of poor customer service and overpriced coverage.