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Public hospital or private hospital?

Jack was travelling home to New Zealand from a trip of a lifetime with a group of fishing buddies. On his flight from Bangkok to Australia he became blind in one eye. Shortly after arriving in Australia, Jack went to the nearest eye clinic where he was diagnosed with a detached retina and referred to a specialist surgeon at a private hospital for an operation the following day. The operation was successful, and Jack returned to New Zealand as planned.

After arriving home Jack lodged a claim with his travel insurer. Jack was shocked when the insurer declined the claim referring to two exclusion clauses in the policy:

  • treatment at a private hospital in Australia is excluded because New Zealand has a reciprocal treatment agreement with Australia meaning that public hospital treatment is free
  • the policy requires medical treatment to be pre-approved wherever possible.



The insurer declined the claim because Jack had proceeded with private hospital treatment without giving:

  • it the opportunity to direct him to a public hospital
  • the public hospital the opportunity to treat him for free.

Jack said this was very unfair. He is an unfamiliar traveller and was disorientated and stressed when he arrived in Australia blind in one eye. Jack said his condition was urgent, and without immediate surgery, he would have been permanently blind. Jack felt he made the best choice in the circumstances and that the insurer should cover his medical expenses.



We were sympathetic to Jack’s situation, aware of the stress that he would have been under and that reading the policy would have been the last thing on his mind. However, the policy wording was clear, and we concluded the insurer was entitled to decline the claim because Jack’s treatment had been carried out at a private hospital without giving the insurer the opportunity to find alternative and free treatment.

We did consider a statement from the doctor who treated Jack about the urgency of the situation and the uncertainty that immediate treatment was available at a public hospital, but were unable to conclude that private hospital treatment was inevitable.



We recommended that Jack’s complaint not be upheld and should be discontinued.


Insights for or participants

We have investigated other complaints where travellers to Australia have been caught out by going to a private hospital where public hospital treatment was likely available. We suggested to the insurer that its certificate of insurance be changed to include a statement, with information about emergency telephone numbers, that travellers should always contact their insurer before proceeding with medical treatment.