The percentage of Australians with basic hospital cover has dropped to its lowest level in more than a decade, as almost 30,000 people dumped their policies in just three months.

The latest Australian Prudential Regulation Authority data shows health premiums are still rising faster than wages, and out-of-pocket costs are continuing to bite, just one month after a report stated Australia’s health care system had become increasingly unfair, costly and confusing.

The proportion of the population with basic hospital cover dropped to 44.2 per cent – its lowest level since 2007.

That is an entire percentage point cent lower than the same time last year, and the equivalent of 28,000 people dumping their cover since March.

The figures also revealed health insurance premiums rose almost 2.8 per cent over the June quarter, once again outpacing inflation and wage growth.

The president of the Australian Medical Association, Dr Tony Bartone, said it was highly concerning.

“This is a continuation of the same trend, the same spiralling down trend we’ve been referring to for many months now,” he said.

“We need to address the issues underpinning this decline to ensure equity and access to the public health system.

“Our public health system is predicated on a specific amount of work being done on the private system – that is relieving a lot of pressure on public systems.

“If that was to fall over tomorrow, that would [create] an enormous burden, an enormous burden the public system could not cope with.”

The chief executive of the private health insurance industry’s peak representative body, Private HealthCare Australia, also said the figures were worrying.

“Of course it’s concerning, we know people are finding it hard to cover the cost of the premiums, and private health is perceived as expensive,” Dr Rachel David said.

But she pointed to the fact the percentage of benefits paid had risen by 3 per cent in the past quarter.

“People are getting value for their money, particularly if they hang on to their private health insurance for the long haul.”

Out-of-pocket costs vary depending on where you live

The figures also revealed Australians are paying an average of $315 in out-of-pocket expenses every time they go to hospital, an increase of almost 2 per cent in 12 months.

Gap fees for specialists were an average of $151 – but varied greatly depending on location.

Australians from Canberra were charged much more for specialists, and paying an average gap fee of $271.40.

They were closely followed by those from NSW, who paid an average of $209.40 in out-of-pocket expenses, while those from South Australia paid the least – less than $70.

The Grattan Institute’s Health program director, Stephen Duckett, said there were several problems with the system.

“People paying health insurance for years and years, suddenly need to use their health insurance, they go to hospital, and they end up with these surprise bills,” he said.

“Then they get really, really annoyed, and this doesn’t help the health insurance industry.

“People find they’re not covered and they drop out.”

Mr Duckett said while the federal government’s planned specialist fees website would go some way to helping patients avoid bill shock, it was not a silver bullet.

The website will list the costs of individual specialists in a bid to crackdown on doctors charging excessive fees.

“Transparency without a doubt is a good thing, it is really important consumers know what they’re going to pay,” Mr Duckett said.

“Unfortunately, transparency in health care is really hard to do.

“The surgeon will tell you what the surgeon’s fee is, but they may not know what the anaesthetist charges, or the radiologist charges, so they may not be able to give you the full picture.”

In a statement, a spokesman for the Health Minister Greg Hunt said the government was continually working to improve the sector.

“The Morrison government is delivering the most significant reforms to private health insurance in over a decade, which is making insurance simpler and more affordable for Australians,” he said.

“Work has already commenced with the healthcare sector to identify and implement the next wave of improvements for private healthcare.”

-ABC