Private health insurance premiums are outstripping inflation and wage growth, as Australians find more cause for complaint with their policies.
A new Australian Competition and Consumer Commission report released on Monday found consumers paid $1 billion more in premiums in 2016/17 than the previous year, totalling more than $23 billion.
"Premium increases have been greater than inflation and wage growth in recent years," the ACCC found.
ACCC acting chair Delia Rickard said it was "very difficult" for consumers to properly compare and choose policies for their needs.
"Many are shocked when presented with expensive bills for medical services and products they thought they were covered for," she said.
The report shows consumers are shifting towards lower-cost policies with greater exclusions or a higher excess.
"Consumers are increasingly questioning whether the benefits of private health insurance offset the premium increases--a trend that should concern the industry," Ms Rickard said.
As of June 2017, more than half of all Australians still held hospital or general health insurance cover.
For the fourth year running, complaints to the Private Health Insurance Ombudsman also shot up, to the tune of 30 per cent.
Most of the complaints were directed at the benefits paid by insurers to consumers.
"Clear and prominent disclosures are one measure that can rebuild waning trust," Ms Rickard said.
The report has landed amid ongoing federal government attempts to reform the sector, with Health Minister Greg Hunt announcing a string of measures in October 2017.
He wants to make private health insurance simpler and more affordable, working with medical professionals to improve policy transparency.
The ACCC is calling on the private health insurance sector to make its products more consumer-friendly, with reliability and transparency key to doing so.
Since June 2016, the ACCC has taken action against health insurers Medibank, NIB, Ramsay Health Care and Australian Unity for breaches of Australian consumer law.
