Health funds hit back at 'junk' claims

Private health insurers have defended 'junk' policies, insisting young Australians don't want to pay for services they don't need.

Private health insurers have hit back at claims they're selling Australians useless "junk" policies.

Medibank, NIB, HCF and HIF are among those named and shamed by consumer advocacy group Choice for charging consumers thousands for products with so many exclusions they offer little benefit above what's offered through Medicare.

The insurers argue they're offering cheaper products to younger members who are fit and healthy and want to be insured but don't want to pay for services they don't need.

"Our aim is to provide a low-cost affordable entry to private health insurance for consumers and we encourage them to upgrade as soon as they can," HIF managing director Graeme Gibson said on Wednesday.

"It's disappointing that Choice is attacking us for enabling that choice."

HCF managing director Shaun Larkin said its Accident Hospital Only Cover, singled out by Choice, was a policy available on request and not actively marketed, representing less than 0.3 per cent of its total policies.

A Medibank spokesman said the fund was listening to members who wanted affordable health cover in the event of unexpected accidents.