Private health insurance reforms introduced by the federal government to make the policies easier for consumers to understand have been undermined by industry lobbying, according to health policy experts who say the system is as confusing as it ever was.On Wednesday, the consumer advocacy group Choice published its review of private health insurance policies and their cost following their reclassification into a tiered system.From April, many of the 70,000 existing private health insurance policies were labelled as gold, silver, bronze or basic, with “plus” versions of those categories also available.

Gold policies represent the highest level of coverage and basic the lowest, allowing consumers to more easily identify what level of coverage they needed and avoid junk policies.But the Choice review found more than 215 silver and silver plus policies that cost more than gold policies from competitors, meaning consumers are still confused by their options and paying more for less coverage.The worst offender nationally is Frank (GMHBA) Health Insurance, with the most expensive silver plus policy in every state and territory.

Choice health campaigner Dean Price said the private health insurance industry was in a “death spiral”.“People already find health insurance high cost and low value,” he said.“This investigation uncovers more reasons why people don’t trust the companies offering these expensive policies.

The death spiral this industry is facing is self-imposed and they can’t be trusted to fix it themselves.” Major health insurers such as Medibank, Bupa, HCF, HBF and NIB also feature in Choice’s analysis of junk silver plus policies.The chair of the Australian Healthcare Reform Alliance, Jennifer Doggett, said the problems uncovered by Choice made clear that the government’s attempt to make private health insurance more affordable and consumer-friendly had failed.“Consumers are clearly no better off than they were before these changes were introduced and are still struggling to make sense of a poorly designed, inefficient and inequitable insurance system,” she said.

“These findings will erode the already fragile relationship consumers have with private health insurance and reinforce their belief that private health insurance funds are putting their own interests and profits above consumer interests.” She said Achra supported Choice’s call for an independent inquiry into private health care. Grattan Institute health economist Stephen Duckett said when the tiered reforms were originally introduced, only gold, silver, bronze and basic categories were available in order to make the system as easy for consumers to navigate as possible.“But because of lobbying from the industry the government introduced these ‘plus’ categorisations,” Duckett said.

“No longer is there a simple four-category system to easily compare policies.We have products that are patently worse being sold at higher prices.The simplification promised is not happening.”