Australians are shelling out more for private health insurance, only to find themselves receiving less in return, according to a recent study by the leading doctors’ representative organization in the nation.

The Australian Medical Association (AMA) has unveiled its latest Private Health Insurance Report Card, revealing that many consumers are moving away from gold-tier policies and reassessing the worth of other plans, even as insurance company profits continue to climb.

The AMA has emphasized the urgent need for reform in the sector, with President Dr. Danielle McMullen advocating for the creation of an independent private health authority to spearhead these changes.

“Australia’s healthcare system is valued for its combination of public and private services, yet both segments are facing mounting challenges,” McMullen noted.

“Public hospitals are dealing with a severe backlog crisis, forcing more patients to turn to the private sector for their healthcare needs.”

“However, runaway insurance premiums, low value offerings and shady tactics like product phoenixing leave customers facing tough choices about the level of cover they can afford.”

The report card showed that every year since 2008, the growth of private health insurance premiums has outstripped inflation, health sector inflation, average weekly earnings and the indexation of the Medicare Benefits Schedule (MBS).

Between 2008 and 2024, premiums climbed more than 100 per cent, while MBS indexation – which was frozen for several years from 2013 – increased by less than 20 per cent.

The report card also shows that over the six years to June 2025, insurers increased benefits paid for in-hospital medical treatment by only 18.1 per cent, while sector profits grew by nearly 50 per cent over the same period.

In 2024-2025, insurers returned 84.2 per cent of premiums to consumers as benefits, below the 2019 level of 88 per cent.

The AMA is calling on the federal government to mandate a 90 per cent return minimum for insurers.

“Of course, private health insurers must make a surplus to be sustainable, but it is clear they are holding out on Australians while recording significant profits each year,” McMullen said.

“These insurers have ample capacity to increase the benefits paid to patients.”

The report also found gold-tier policies are in decline as consumers face rising premiums and cost-of-living pressures.

Since the start of the COVID-19 pandemic in March 2020, the number of gold-tier policies have dropped by 360,000, despite the overall number of policies growing.

“These trends show that private health insurance is becoming less affordable for many Australians – and we are already seeing the drastic effects of this, with at least 14 private maternity units closing over the past five years,” McMullen said.

“The need for a Private Health System Authority to better regulate the sector and drive long-term reform has never been more crucial. There are too many bodies involved in the regulation of private health – a single, independent authority would provide a unified and coherent approach.”