Cigna says it’s taking action after insurance auction
Cignas health insurance auction, which ran into the millions of dollars this year, has been shut down by the insurance giant, with the company announcing it would be cancelling some of the $9,500 insurance covers that had been bought.
Cigna said on Friday it had decided to stop covering those who had bought insurance through its online marketplace and other third-party insurance providers in 2018.
“We will be taking some of these consumers out of the pool and giving them a better opportunity to get a better deal,” a spokesperson told ABC News.
“Cignas is taking steps to ensure consumers who purchased insurance through our online marketplace, or through our third-parties, have a better price, and better options for care when they need it.”
The spokesperson said that Cignans decision was “based on a number of factors including consumer protection, consumer protection laws and regulations, and regulatory guidance”.
“Censure will also apply to customers who purchased policies through our insurers, and to customers with third-level providers who were not covered in the first place.”
The announcement comes as the government prepares to roll out an overhaul of the insurance market in 2018, which could see the industry under pressure from the private insurance sector.
It will also see an expansion of the Commonwealths health insurance rebate, with many insurers expected to sell policies under a new system that will be much more generous than the current system.
“With this in mind, Cignash’s decision will help us achieve a fairer, more affordable and more effective marketplace for consumers,” the spokesperson said.
“It’s also about ensuring that consumers who were able to buy insurance through Cignus through the online marketplace have a choice of options.”
The health insurance marketplace, which runs for four months, was used by more than 100,000 Australians and was set up to provide cheaper, more comprehensive health insurance coverage to people who couldn’t afford it on their own.
But Cignacas online insurance marketplace was run by the same company that operates the private market.
That company, Anthem, had been involved in the auction process from the very beginning, with bidding up to $4 billion for the first year.
But Anthem, which has been at the centre of several scandals including its alleged role in fraud and money laundering, had already been forced to shut down its online health insurance marketplaces last year.
Anthem, however, managed to get its health insurance policy through, after the government took control of the marketplace and the Australian Competition and Consumer Commission stepped in to halt it.
But there were some major issues with Anthem’s system, which was still open to the public.CVS Health had also been involved, with its own online marketplace offering a similar insurance offering.
The ACA also has a separate online insurance market, which Cignalas used to buy its own policy, but which was shut down earlier this year.