Australians are still confused about their private health insurance options and are being scammed despite a Federal Government overhaul designed to simplify the system.
That's the central finding from research commissioned by consumer lobby group Choice, which found Australians purchasing some health policies were losing hundreds of dollars a year.
Changes introduced earlier this year were designed to make policies easier to understand — labelling them as gold, silver, bronze and basic with "plus" versions of some categories also available.
But Choice analysis has found more than 215 silver and silver-plus policies that cost more than gold policies from competitors.
It has named and shamed the worst offenders, with Frank (GMHBA) Health Insurance, Medibank, Bupa, HCF, HBF and NIB featuring on the list.
Choice health campaigner Dean Price said industry lobbying had undermined the Government's changes.
"[Health] Minister [Greg] Hunt tried to make health insurance clearer, but the health insurance lobby succeeded in making it more complicated," he said.
"Choice's investigation shows how the health insurance industry is profiting from the confusion they created."
Mr Price said the industry's "death spiral" — as young and healthy people abandon private health cover, leaving a larger proportion of less-healthy, older and expensive users — was self-inflicted.
"This investigation uncovers more reasons why people don't trust the companies offering these expensive policies," Mr Price said.
"The death spiral this industry is facing is self-imposed and they can't be trusted to fix it themselves."
Health insurers dismiss allegations as 'absolutely ridiculous'
The private health insurance industry's peak representative body, Private HealthCare Australia, dismissed the allegations made as "absolutely ridiculous".
Private HealthCare Australia chief executive Rachel David said private health insurance policies were clearer than ever.
"The research Choice has shown is showing actually the policy is working at making it much clearer what people are covered for and what level their cover is," she said.
"The fact Choice is even able to do this shows the policy is having its desired effect."
She said the "plus" categories gave funds flexibility to compete on value and price.
"If there weren't the plus categories, the reforms would not have been able to be implemented because it would have been anti-competitive simply to force all health funds to offer the same product in the same tier," she said.
"There will inevitably be some overlap between the categories as health funds compete with each other on price and values but the important thing is consumers are now much more easily able to compare between policies."
In a statement, a spokesman for Mr Hunt said the Government was making private health insurance easier to understand and more affordable.
He says insurers are now required by law to explain to consumers exactly what is covered in a policy through the classification system, which is a "no surprises" approach.
