The number of Australians abandoning private hospital cover has surged, with the latest official data igniting concerns about the viability of the system as public hospitals struggle to cope with thousands more patients.

Figures released by the Australian Prudential Regulation Authority on Thursday show that 65,000 fewer Australians had health insurance in December 2018 compared to a year earlier.

AMA president Dr Tony Bartone said Australians were ditching private health insurance because they realised they were being sold a "dud". Credit:Alex Ellinghausen

It marked the largest 12-month fall in private hospital coverage in 15 years, with falls across most age groups - and the most pronounced falls among healthy young adults.

AMA president Tony Bartone said young Australians were ditching private health insurance because they realised they were being sold a "dud".