Second-tier insurance policies a 'scam'

Some private health insurers are charging more for Silver policies than Gold policies from other competitors.

Consumer advocate group Choice says it found more than 215 Silver and Silver Plus policies were "scamming" more money from consumers while offering less cover.

Depending on which state or territory you live in, you could save over $1700 by moving from a Silver policy to a Gold.

The federal government introduced new laws this year requiring insurers to break their policies down, from Basic through to Gold.

But Choice health campaigner Dean Price says this has only led to more confusion.

"People already find health insurance high cost and low value," Mr Price said.

"This investigation uncovers more reasons why people don't trust the companies offering these expensive policies."

The worst offender, according to Choice data, is Frank Health Insurance, with its Silver Plus policy more expensive than competitors' Gold policies in every state and territory.

But Choice said major insurers such as Medibank, Bupa, HCF, HBF and NIB also featured predominantly in their analysis.

Mr Price said the government should call an inquiry into the health insurance industry, saying it was in a self-imposed "death spiral".

Earlier this year, Choice found some Basic policies offered by insurers were more expensive than Bronze policies.

In August, the Australian Prudential and Regulation Authority released data that showed more Australians were dumping their private health insurance policies.

A report from think tank The Grattan Institute in July said there was an "unhappy mix" of public and private health care in Australia, and the industry faced collapse if young people continued to abandon policies.