The Australian Medical Association has delivered a grim view of the nation's private health insurance providers, saying falling membership rates and rising premiums are threatening the viability of the entire health system.
The AMA handed down the assessment in its latest annual report card on private health cover.
AMA president Michael Gannon said patients were not getting value for money and were being left confused by unnecessarily complex policies that often did not provide an acceptable level of cover.
"It doesn't paint a particularly pretty picture," Dr Gannon said.
"Year on year we see growth in the profits of the for-profit health insurers in the same time that the number of exclusions in their policies increases.
"It's only after a doctor has scheduled surgery that we have the horrible situation where a hospital clerk is in a position of having to inform a patient they're not covered."
Dr Gannon said 15 years ago, virtually no policies had exclusions, but they had now become commonplace.
"Too many people find out they're virtually getting nothing for their significant investment," he said.
Complaints highest in decade
The report is compiled annually using data from a range of sources, including the Australian Prudential Regulation Authority (APRA).
It shows that in 2016-17, there was a 30 per cent increase in the number of complaints to the Private Health Insurance Ombudsman on the year before — the highest number of consumer complaints in a decade.
Australia's largest not-for-profit health fund, HCF, which is set to merge with Western Australia's largest health fund HBF, was the best performer on the AMA's league table.
It paid the highest benefit in 12 of the 21 categories.
Medibank and NIB were among the lowest ranked.
Dr Gannon said the private health system was a key part of universal health care, but insurers were not thinking long-term.
"I'm keenly conscious that every time we shine a light on the failure of health insurers to deliver a decent product, we diminish the value proposition of private health insurance, so we have to be very careful every time we talk on these matters," Dr Gannon said.
"The private hospitals have a stake, the insurers have a stake, Australia's doctors have a stake and without a doubt Australia's patients have a stake.
"It's a key plank of universal healthcare. We take no pleasure in diminishing it in any way."
Higher costs linked to more payouts: industry
Private Healthcare Australia (PHA) — which represents 20 registered health funds in Australia — said the criticism from the AMA was not helpful, and rejected its assertion that consumers were not getting value for money from their health funds.
"No one likes to see costs go up," PHA chief executive Rachel David said.
"But the one reason and the only reason that premiums increase every year is because health funds are paying for more healthcare."
Dr David attributed the increase in complaints about health insurers to rising cost of living pressures.
"The number of complaints to the Ombudsman is extraordinarily small compared to the number of transactions in the sector. It's about one in 25,000," Dr David said.
"That being said, any increase in complaints is a concern to us.
"As household incomes have remained flat but healthcare costs have continued to rise, that has led to an increase in complaints, as people are struggling with costs and they're getting frustrated with the system.
"But we're happy to work with the Ombudsman and learn from those so we can make it easier for people to choose and use their health insurance."
This article was published and provided by the Australian Broadcasting Corporation. Visit the link below to view Private Health Insurance Report Card.