The federal government is introducing a new system to allow consumers to see exactly what their private health insurance covers.
Health Minister Greg Hunt has unveiled four new policy bands -- to be called gold, silver, bronze and basic -- which will categorise minimum hospital treatments.
The changes are due to come into effect from next April.
Mr Hunt says the system will not lead to a change in prices for procedures, but allows consumers to easily see what their policies pay for.
"What this means is that we take existing policies, no change in price, no change in coverage. But we make it simpler so that everyone can see on the one page exactly what is in place."
Under the proposed system, bronze policies would cover 20 basic hospital treatments -- including appendix surgeries, chemotherapy and tonsillectomies.
Silver band policies would cover procedures like foot surgery, heart treatment and dental work, while other procedures such as cataract surgery, I-V-F, kidney dialysis and joint replacements would be in the top gold band.
Basic hospital coverage will remain as the final category.
Private Health Care Australia chief executive Dr Rachel David says the changes will help consumers understand their health policies better.
"We've had consistent feedback that people have found the current system of choosing products hard to understand, particularly when they've come to compare the products on the market. So we've taken that into account and with other stakeholders, like doctors and hospitals, we've worked through health fund products -- line by line over the last two years -- to come up with this classification, which we think will really help consumers choose and use their health insurance."
While welcoming the new categories, the Federal Opposition says changes will do little to curb costs for consumers.
Opposition health spokeswoman Catherine King says the Turnbull government needs to direct its focus towards making private health insurance more affordable for Australians.
"What we've seen from this government consecutively is increasing private health insurance premiums. The reforms that they have put in place today have not benefitted consumers. We've had a 4 per cent rise again this year. We've had consecutive thousand dollars over the time of this government of private health insurance premium increases. And the government has failed to actually deal adequately, as Labor plans to do, with this crisis in private health insurance affordability."
The announcement comes as reports emerge of private health insurance executives taking a lavish European junket.
Newscorp has reported 40 health insurance representatives went on an all-expenses paid trip to Portugal last month [[June]] at a cost of $600,000.
Ms King says it is not a good look for an industry that regularly increases its premiums.
"Private health insurance needs to explain how this junket is of any benefit to its members at all. When you have got a private health insurance crisis in this country -- people increasingly finding it difficult to afford their private health insurance and afford the increasing health insurance premiums -- the industry needs to explain why it is a priority for it to send dozens of its executives over to Europe."
But insurers have defended the Portugal conference trip.
Dr David says it was of no cost to consumers.
"Management expenses from the health fund are at an all-time low. They've been declining significantly over the last 15 years and the activities at the conference in no way puts upward pressure on premiums. The entertainment and meals were of a modest nature and the academic program was pretty robust and enabled health funds to work on issues like cyber crime and security to help drive premiums down."
