Australians paid $834 million more for health insurance in 2017-18 compared to the year before, despite hundreds of thousands either dropping their cover or shifting to cheaper policies, a new report shows.

The Australian Competition and Consumer Commission's annual report on the private health insurance industry found policyholders paid $23.9 billion in premiums in the past financial year – an increase of 3.6 per cent – on the previous year's figure.

The health insurance industry has long wanted to offer discounts to attract more young people. Credit:Jim Rice

But in that time, tens of thousands dropped their hospital or combined cover and hundreds of thousands switched to policies with exclusions, or excess and co-payments.

ACCC deputy chair Delia Rickard said the high cost of health insurance was a real concern for consumers, especially with annual premium increases outstripping inflation and wage growth.