The report card is designed to help consumers choose the right private health cover, determine whether they are receiving value for money from their cover and the differences between policies and the operation of funds. The report highlights major issues in the private health sector, including the overall complexity of choosing the right health fund and level of cover. It provides a comparison of the proportion of in-hospital medical costs covered by each fund for common hospital procedures. 

The report finds that the private health insurance system is in trouble and needs real reform that balances the needs of hospitals, suppliers, doctors, insurers and patients.

Findings

• Over several years, many private hospitals have closed or downgraded their services in critical areas such as maternity, mental health and reconstructive surgery, leaving patients struggling to access the services they need and doctors struggling to provide care for their communities.
• Australian private health insurers reported significant profits for the 2024 financial year, with gross margins from hospital treatment policy premiums alone approaching 16% of hospital policy premiums paid.
• Over the five-year period to June 2024, net private health insurance profits (including net private health insurance investment income) increased by 48%, while management expenses rose by 50%.
• Evidence of insurers avoiding ministerial scrutiny of premium increases by closing cheaper policies to new customers and releasing similar but much more expensive policies was deeply concerning.
• Over the past few years more than 400,000 Australians have downgraded the level of private health insurance cover they hold, which means many are no longer covered for the kinds of care they may need in private hospitals, leaving patients underinsured and placing greater pressure on public hospitals.
• The significant differences in the level of benefits provided by various insurers for common hospital procedures highlights the fact that when choosing a private hospital treatment insurance policy, consumers need to look beyond a comparison of the policy premiums charged for these products by different funds.

Recommendations

• A system overseen by a fit-for-purpose and independent Private Health System Authority that ensures patients have access to affordable private health insurance and can receive treatment when and where they need it.
• The Government should mandate a minimum amount that every insurer is required to return to patient care in the form of claims benefits.