A survey by the Consumers Health Forum has found only half of the Australians who take out private health insurance are confident they understand what their policy covers, and only 1 in 4 people found it easy to compare policies.

Key points: Consumers Health Forum survey found 38 per cent of insurance users satisfied with their policies.

Consumers Health Forum survey found 38 per cent of insurance users satisfied with their policies. Only one in four people found it easy to compare policies.

Only one in four people found it easy to compare policies. One in five people had their claims denied by their insurer.

One in five people had their claims denied by their insurer. MyCover would require private health funds to offer standardised policies.

The survey's findings also showed more than one in five policy holders reported having a claim denied by their insurer, and overall satisfaction of users with their policies was at only 38 per cent.

With just over half of the Australian population having some kind of private health insurance, the national health peak body for consumers will present a new plan to the Government, called myCover.

The group hopes to persuade the Government to require private health funds to offer standardised policies, so consumers can easily compare and weed out the so-called "junk policies".

One of the biggest criticisms of private health funds is that they do not make clear what particular levels of cover they provide.

And despite paying hefty average annual premiums of almost $2,000 for singles and more than $4,300 for families, people are often left confused about what their policy actually covers.

More than 48,000 products on the market

Consumers Health Forum chief executive, Leanne Wells, said there were widespread concerns about the cost and complexities in private health policies.

"It's a pretty poor result isn't it, because it's really showing that only 38 per cent of people with private health insurance policies are overall satisfied with their policy," she said.

"So generally speaking to the broader issue, that people are perceiving declining value in their private health insurance across the community."

Ms Wells said the survey found people were not only dissatisfied with their policies, but found shopping for an alternative policy too confusing.

"The main issue I think is that it's a really complex market - there's over 48,000 health insurance products on the market, they're all different, they're all hugely variable," Ms Wells said.

"It's not like a straight consumer decision, like shopping for a fridge or an iron or something, it's very very difficult to compare and contrast and look at the value you are getting."

Ms Wells said people often signed up to a policy and then forgot about it, and when they went to claim something found they were not covered for what they had thought.

She said people either did not read the fine print, or the inclusions in their policy had not been properly communicated to them by their insurer.

"It includes people making ill-formed decisions about what policies they take out in the first place, and that's again why we are calling for more transparent information, better comparable information."

MyCover would require simple standardised policies

The group's plan will require health funds to offer simple, standardised policies that are easy to compare.

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The Consumers Health Forum will also suggest that myCover would upgrade the public information portal to a "single one-stop shop", where consumers could compare and choose policies, as well as access information about doctor and hospital fees.

A spokesperson for Health Minister Sussan Ley said in a statement the Department's own survey had also found Australians were worried about affordability and transparency.

The spokesperson said the minister remains concerned about the growing number of junk policies and hidden catches currently found in the market.

The Consumers Health Forum will also call on the Government to consider replacing, or limiting, billions of dollars in government rebates for ancillary services beyond hospital care.

"It's the Government's responsibility to ensure it's getting better value for taxpayer's dollars," Ms Wells said.

"There's almost $6 billion a year going into a rebate for private health insurance, they're concerned about the value people are getting as well.

"MyCover is a policy idea that we've come up with that we wanted to contribute to the debate about where new policy goes around this issue."

Health Minister Sussan Ley will release the results of the review of the private health insurance system in the first half of the year.