The Turnbull government is under renewed pressure to tackle the cost, complexity and poor coverage of private health insurance amid warnings the problems are threatening the future of Medicare.
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Health leaders, consumer advocates and policy experts have given damning assessments of the state of Australia's private health care regime in a new series of articles published by the Consumers Health Forum.
The authors warn relentless above-inflation premium price rises are threatening the viability of the entire sector, that insurers are failing people with chronic illnesses, and that the current model is contributing to growing inequality.
The strongest criticism comes from distinguished former public servant John Menadue, who says Medicare is now "seriously threatened" by the growth in what he describes as "inefficient and unfair" private insurance.
"It threatens our universal health system through seriously weakening the ability of Medicare as a single funder to control costs," Mr Menadue writes.
"We have seen the enormous damage that PHI [private health insurance] has wrought in the US. We are steadily going down the same dangerous path.
"On present trends, we will have a divided healthcare system. One system will be for the wealthy with a safety net system for the indigent.
"The Australian government today knows that PHI is in real trouble. But for ideological reasons it wants to prop up what John Howard foisted on us in 1999."
That was when the Howard government introduced the private health insurance subsidy, which now costs Australian taxpayers $11 billion a year. Since then, premiums have risen by over 150 per cent, while inflation has been just 60 per cent.
The Consumers Health Forum hopes the contributions will help convince the government to order a comprehensive review of the sector.
"Most of these articles are pointing to serious inadequacies, whether it be in relation to the cost and complexity of insurance, the meagre coverage for many people, particularly the chronically ill, or ineffectiveness of government subsidies which are supposed to ease public hospital waiting times," CEO Leanne Wells said.
The government last year established a Private Health Ministerial Advisory Committee to advise it on reform but there are concerns it will not recommend any significant changes. In one of the articles released today the advisory panel's chairman, seasoned public servant Jeff Harmer, says the government has "limited options" for regulation.
In another contribution, Dr Lawrie Malisano from the Royal Australasian College of Surgeons said: "The long term viability of the private health model in Australia will also decline if health insurance premiums continue to rise above CPI and wages growth."
Professor Malcolm Hopwood from the Royal Australian and NZ College of Psychiatrists questioned whether it was "morally justifiable" for insurance companies not to cover such a large percentage of the burden of disease.
Health financing analyst Ian McAuley described private health insurance as a "high cost, privatised tax" that failed to deliver value and certainty for consumers, while CHOICE's Matt Levey said the "toxic combination" of surging prices and complexity was leading many Australians to downgrade or drop their cover.
While Health Minister Greg Hunt has been keen to promote this year's average premium price increase of 4.84 per cent as the "lowest premium price rise in 10 years", it pushes the cumulative premium price rise to 54.6 per cent since 2009.
Over the same time period, inflation pushed up the general level of prices 17 per cent.
