The Australian Medical Association (AMA) has released its 2025 Private Health Insurance Report Card, revealing that Australians are consistently paying more for private health insurance while simultaneously receiving less value in return. The report highlights a private health sector in urgent need of reform, characterized by large insurer profits, diminishing top-tier coverage, and record high exclusions. The Report Card, published December 5, 2025, is designed to assist consumers in choosing appropriate cover, while also noting that the most important features of a health insurance product vary for each individual or family.

Runaway Premiums and Reduced Benefits

The AMA report card detailed stark financial discrepancies in the sector over the past decade and a half. Since 2008, the growth of private health insurance premiums has surpassed inflation, average weekly earnings, health sector inflation, and the indexation of the Medicare Benefits Schedule (MBS). Between 2008 and 2024, premiums climbed by over 100 per cent. In contrast, MBS indexation—which faced a freeze for several years beginning in 2013—increased by less than 20 per cent over the same period.

While sector profits grew by nearly 50 per cent over the six years leading up to June 2025, insurers increased benefits paid for in-hospital medical treatment by only 18.1 per cent.

Furthermore, the percentage of premiums returned to consumers as benefits is declining. In the 2024–25 period, insurers returned 84.2 per cent of premiums, a noticeable drop from the 88 per cent returned in 2019. Consequently, the AMA is now calling on the federal government to mandate that insurers return a minimum of 90 per cent of private health insurance premiums back to consumers in the form of benefits.

Affordability Crisis and Service Cuts

Despite the overall number of Australians holding hospital treatment cover being higher than ever before, a closer look at policies reveals a deterioration in quality. The AMA noted that fewer policies now offer top-level coverage, and the overall value of private health insurance is eroding, with exclusions reaching record levels.

These trends are making private health insurance increasingly unaffordable for many Australians. Since the onset of the COVID-19 pandemic in March 2020, the number of gold-tier policies has dropped by 360,000.

AMA President Dr. Danielle McMullen stated that consumers are facing difficult choices regarding the level of cover they can afford due to “runaway insurance premiums, low value offerings and shady tactics like product phoenixing”. Dr. McMullen pointed to the “drastic effects” of this trend, including the closure of at least 14 private maternity units over the past five years.

Call for Independent Authority to Drive Reform

The AMA warned that Australia’s health system, valued for its unique blend of public and private healthcare, is under increasing pressure. Public hospitals are struggling with a severe “logjam crisis,” which is diverting more patients towards the private sector.

In response to the report’s findings, Dr. McMullen renewed calls for an independent Private Health System Authority. She argued that this single authority is crucial for better regulation and long-term reform, asserting that a unified and coherent approach is necessary given the number of bodies currently involved in regulating private health.

The private sector remains a vital component of the national system, delivering two out of every five hospital admissions and more than two in three planned surgeries—services that would otherwise need to be delivered by public hospitals. The AMA is the peak professional body for doctors in Australia, committed to working towards an effective health service through advocacy and policy campaigns.