Its analysis showed a consumer who did not take out insurance until 45, attracting a 30% premium loading, would save more than if they took insurance at 31 to dodge the loading.
Analysis Should you have private health insurance? Try our interactive calculator This calculator will show you if you should get private health insurance for tax reasons, and the total amount it would cost you over your lifetime
A 46-year-old would save more than $9,000 by paying the loading rather than picking a low-cover insurance option.
“Taking out poor-value health insurance simply to avoid a future loading on premiums may ultimately leave consumers worse off,” said Matt Levey, the director of campaigns and communications.
He advised young Australians to take out health cover “when you need it”, rather than signing up early to avoid the loading.
In April, a forum of medical experts and policy analysts criticised private health insurance for lacking value and transparency. In November, several health economists and policy experts told Guardian Australia the system should be scrapped.
Levey said the Choice analysis found 13% of policies on the market were “junk”, and did not provide cover for heart attack, stroke or cancer.
“There are lots of rational reasons to take out private hospital cover ... but if you’re doing it just to avoid the lifetime health cover loading you may want to think twice.”
Data from this year showed private health premiums had risen 54.6% since 2009, while complaints to the private health insurance ombudsman rose 24% between the 2013-14 and 2014-15 financial years.
Last year the Consumers Health Forum found that private health insurance was becoming increasingly unaffordable, yet many packages lacked adequate coverage.
Propping up private health insurance is like putting lipstick on a pig John Menadue
“Evidence has mounted in recent years that private health insurance has failed to deliver on one of its fundamental goals: taking pressure off the public system,” it said.
“Despite offering no promise of improved healthcare, premiums continue to rise on junk products that many consumers feel obliged to purchase in order to avoid punitive measures, such as the Medicare levy surcharge and lifetime health cover.
“Consumers continue to pay high and rising premiums on these policies with misplaced confidence that they will be covered”.
Both Choice and the Consumer Health Forum have tools to advise consumers on whether they need private health insurance.
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