Australia’s private health insurers are under fire after a federal watchdog revealed a surge in consumer complaints and evidence of “phoenixing” behaviour, prompting calls from the Australian Society of Ophthalmologists (ASO) for urgent government intervention and tougher oversight.

In its April–June 2025 quarterly update, the Private Health Insurance Ombudsman (PHIO, part of the Commonwealth Ombudsman's Office) shows 791 complaints were lodged against health funds in the last quarter alone, with the majority involving service failures, policy cancellations, and disputes over pre-existing conditions.

The Ombudsman also warned of emerging “phoenixing” practices, where insurers or related entities close and reappear under new names, leaving consumers uncertain about their coverage and rights.

ASO President Dr Peter Sumich said the report exposed a growing accountability gap within Australia’s private health system.

“Private health insurance is supposed to provide confidence, not confusion,” Dr Sumich said.

“When insurers fail to communicate clearly or use corporate tactics to avoid responsibility, both patients and practitioners pay the price.

“Doctors are seeing it firsthand with patients who don’t understand what’s covered, who get caught out by policy changes, and who end up out of pocket for essential care.”

Dr Sumich said the findings strengthen the case for tougher oversight of the $30 billion private health insurance industry, arguing that existing regulation has failed to keep up with the sector’s growing complexity and consolidation.

The ASO's board and members have now renewed the call for the establishment of a Private Health Commission, an independent body to oversee transparency, enforce fair dealing, and investigate corporate conduct. The ASO has also urged Health Minister Mark Butler to act swiftly to curb misconduct and restore integrity to the private health system.