Doctors and consumer groups are demanding an inquiry into Australia's private health insurance industry, as exorbitant fees force private patients to use the public system.
Brisbane obstetrician Gino Pecoraro says it's "criminal" that even the most comprehensive insurance policies are failing to cover patients for the cost of their medical bills, leaving them with out-of-pocket fees they can't afford to pay.
The former president of the Australian Medical Association in Queensland says the problem lies with legislation that prevents insurers from paying more for procedures than the Medicare Benefits Schedule fee.
He also blames a lack of competition.
"We should have a Senate inquiry into the whole industry and open it up," Dr Pecoraro told AAP on Tuesday.
"Why can't we open up to health funds from all around the world and let Australian citizens buy a product that actually means something."
The Consumers Health Forum says an inquiry is overdue, with the most recent review by the Productivity Commission now almost 20 years old.
Forum chief executive Leanne Wells says consumers are becoming disillusioned, with private patients more likely to face higher out-of-pocket costs than those without insurance.
Rising premiums and policy exclusions also have left many considering dropping out altogether.
Meanwhile, complaints to the Private Health Insurance Ombudsman in the March quarter were up 23 per cent from last year.
"It's timely to ask what problem is private health insurance trying to solve, now, and do we need to do a rethink about whether it does what it was set up to do," Ms Wells said.
The Australian Medical Association also supports an inquiry into the industry.
But Private Healthcare Australia president Michael Armitage said it would be "a waste of money".
The problem lay with exorbitant doctors fees and patients who forget what their policy covers.
"We agree people pay too much, but that's not our fault, we don't set the fees, the doctors set the fees," Mr Armitage told AAP.
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