Are we getting ripped off when it comes to healthcare? How does America's system stack up? The results of a recent global health care study will surprise you.

Young Australians are increasingly rejecting private health insurance, questioning whether it’s actually value for money.

New figures show 65,000 people abandoned their hospital treatment membership in 2018 — the biggest 12-month fall in 15 years.

Those aged 25 to 29 had the steepest drops with 33,975 young Australians getting rid of their insurance, the most of any age group, representing a 6.9 per cent decline.

The figures come as a working paper from the Grattan Institute suggested the private health insurance industry feared it was in a “death spiral” and politicians should rethink whether taxpayers should continue to subsidise the industry.

It noted Australians were increasingly dissatisfied with private health insurance and premiums were rising much faster than wages or inflation.

AMA president Tony Bartone acknowledged people wouldn’t be getting rid of private health insurance if it was good value for money.

“Australians are very clever. They certainly realise when they are being sold a dud and that’s why they’re dropping out,” he told the National Press Club this month.

The Grattan paper noted insurance premiums had increased by 30 per cent since 2010/11 compared with an 8 per cent real increase in wages.

Even though people are paying more, their coverage has not increased.

The proportion of policies with excesses, deductibles and out-of-pocket payments has increased, the paper noted.

Twenty years ago, only one third of policies had an excess or exclusion, such as paying the first $500 of the cost of a hospital treatment.

Today more than 84 per cent of policies have some form of excess or exclusion.

The report has sparked debate online, with many sharing stories about how expensive medical treatments are even when they have health insurance.

Here's a private health insurance story: I've been on the public hospital waiting list for 18 month for surgery on my sinuses because the same surgery would cost me >$10k out of pocket with my private health insurance. I've had coverage for nearly a decade. — Shalailah Medhora (@shalailah) July 15, 2019

I've got top level health cover & have spent more than $10k out of pocket on dental with more to pay when I can save up for it — Dana McCauley (@Dana_Adele) July 16, 2019

I’m in the ACT and have top level private health. Last year was out of pocket $12k for necessary stomach surgery but public waiting list was 6+ years. Not many options unfortunately and lucky we had savings. — ᗰEᒪ ᔕᗰITᕼ (@Miss_Mel_Smith) July 16, 2019

I was a healthy 25yo with PHI.



Needed facial surgery post accident playing football. Only time I ever went to claim. Received $700 back from $4k surgery.



Cancelled since.



Just signed back up as it's now cheaper than the Medicare surcharge.



The gov is incentivising rubbish. — Nick Johnston (@ncjohnston_) July 16, 2019

According to finder.com.au, the average cost of private health insurance in 2018 was about $166 per month or $1992 a year.

Despite paying on average about $2000 a year, people are still having to spend thousands when undergoing operations, mainly because the cost of specialist doctors is not covered.

One Sydney mother told news.com.au she spent about $8000 to have her first baby through the private system.

She assumed she would be partly covered for obstetrician visits but was surprised when the only money she got back was from Medicare and not from her insurer.

The 38-year-old pays $5472 a year for health cover for standard hospital cover with a $500 excess and top extras. The policy covers herself, her husband and new baby.

Despite having a high level of cover, her out-of-pocket costs for her obstetrician were about $6450. She also had to pay $500 for an epidural, $400 for the paediatrician and the $500 hospital excess. She also spent hundreds more on blood tests, ultrasounds and vaccinations.

While she doesn’t think she will get rid of her private cover, she will reassess her level of cover.

“It also makes me think twice about having a private obstetrician,” she told news.com.au.

“If you go through the public system it hardly costs anything … you don’t have many out-of-pocket costs.”

Going through the private system also doesn’t guarantee your obstetrician will be available to deliver your baby, and her child was delivered by a different doctor.

However, she said she was grateful to be able to stay in hospital for five days, which is longer than those who go through the public system are able to.

Private Healthcare Australia chief executive officer Dr Rachel David said it was a misconception that young people don’t receive value from their health cover.

“Especially in the areas of dental and mental health treatment, young people are getting value,” she said in a statement.

“Health funds paid out nearly half a million claims to people under 30 last year.”

“We understand we need to make cover more affordable for young people but in order to maintain community rating, we need to address waste in the system, and provide subsidies for care where it is economically efficient to do so.”

She said funds had already made “significant progress” down that path and was committed to reducing out-of-pocket costs for consumers.

“Greater transparency on cost is needed to enable consumers to identify and select suitable providers at the time of referral,” she said.

“This starts at the point of referral — by empowering GPs with the information about what specialists charge.”

She said a new website proposed by the Department of Health would allow GPs to access a range of specialists and what they charge — giving their patients a choice of who they are referred to.

In addition, she said medical specialists should give consumers an upfront and accurate estimate of the costs associated with their procedure.

The Grattan Institute believes the Federal Government needs to reconsider the role of private health insurance, especially as about $9 billion of taxpayers’ money is spent on the industry every year.

Mr Bartone has echoed the calls for reform.

“Two months on from the election, the need for significant health reform remains, and it must still be the Government’s highest priority,” he said.

“Our world class health system is simply groaning under enormous and ever-increasing stress.

“Underfunding, under-resourcing, poor access, waste, inequity and inefficiency are commonplace.”

Dr Bartone said the Government doesn’t need any more evidence to prove problems exist, and there had already been three years of reviews, taskforces, inquiries and committees.

— with AAP

Do you have a story about private health cover? Continue the conversation @charischang2 or email charis.chang@news.com.au