We have a health spending crisis, or so we’re told. So much so that the federal government has dedicated itself to reigning in the “rapid and unsustainable” rate of spending growth.

Of course, it’s only a crisis when it comes to government funding. But what about the spiralling costs for consumers?

When it comes to what pollies expect Australians to shell out in out-of-pocket expenses or private health insurance premium rises, suddenly it appears there is no such crisis at all.

Over the past five years or so, real growth in health expenditure in Australia sat at just over 4%.

Compare that to average rises in private health insurance premiums of 6.1%.

Not only do we not hear anywhere near the level of rhetoric about premium rises, but yesterday when the latest annual rises were announced, health minister Sussan Ley trumpeted her achievement in limiting it to 5.59%.

Leaving aside the question of how successive governments manage to shift the blame for premium rises onto industry when they have final say over them, let’s just pause and consider this victory: a 0.5 percentage point lower increase than average, and a final rise that is nearly triple the rate of inflation.

And it’s not just your premiums that are rising. In the past year, the average out-of-pocket for in-hospital care rose 4.6%. If you have a baby using your private cover, chances are you will end up paying more than 10% of the costs out-of-pocket. For orthopaedics, this jumps to 27%.

There’s no evidence this increase has come from falling profits for the insurance industry – although it is facing rising costs for some expensive treatments such as prostheses. Overall its profits increased last year. After tax, the industry made $1.19bn in the year to December. Health insurance business premium revenue rose nearly 7%, while expenses were steady as a proportion of revenue and margins were up.

And consumer complaints have been rising. One survey found fewer than half of all private health insurance policies offer adequate cover for private hospital care, and many patients have no idea what their insurance includes.

Doctors are concerned about the rise in so-called “junk” insurance policies, that is, policies that you pay out for, but when you try to use them, your belief that you will be covered for all the care you need turns out to be rubbish.

Private hospitals are also complaining because they are having to turn away patients who believed they would be covered for care. (It’s worth noting that the gross profit margin of the private health insurance industry is far higher than that of the private hospital industry at about 13.5% versus about 8%).

Against this backdrop, the government basically said “we are not going to put up with premiums rising so much anymore”, forcing the industry to re-submit lower requests and achieving a four-year record low in the annual increase.

The reality is, if you want private health coverage that will ensure you can have treatment for serious conditions in private hospitals, you will have to pay.

Take me as an example. As a woman in my 30s who has never held insurance but wants full cover for everything (including obstetric services and orthopaedic surgery) and no excess, the best estimate one of the insurance comparison sites could find me was more than $2800 per year.

But how many times a year am I going to use those services? And how much of an advantage will it be to me to go private over public?

You could have perfectly good reasons to want private hospital access – perhaps you want to more choice in your obstetric care or you fear the horrifically-long waiting lists for so-called “elective” surgery. (Yes, a knee replacement is not an emergency, but it is really acceptable to be forced to wait six months to a year for one?)

But at the moment, many people are opting for private cover for the wrong reasons: trying to get the cheapest deal to minimise their tax or simply because they don’t understand that the lowest price probably also means the lowest cover.

Increasingly, I’ve heard stories of patients who discover their much-needed surgery is actually not covered by their insurance and decide to pay as a self-funded private patient.

In fact, more than 11% of private hospital elective surgeries are self-funded, as are about 3% of such surgeries in public hospitals.

Interestingly, the Australian Institute of Health and Welfare notes costs for these surgeries tend to be lower, indicating that when clinicians know it is their patient who is bearing the cost rather than a major corporation, they make an effort to limit it.

The reality is that private health insurance is much like any other insurance, in that you have to weigh up whether you are better off paying money to an insurer, or putting away money each week for a rainy day.

But it is very hard to make a rational decision about whether your limited funds should be spent on private cover: many people say it’s not until they were in need of care, sitting in a doctor’s office, that they found out about their out-of-pocket costs, limits to their coverage, or how much it would cost them to get their treatment as a self-funded private patient.

The government is due to report back on its review into private health insurance policies some time in the next few months.

It will take a brave government to enforce the kind of transparency, regulation and change that would ensure consumers could be confident they were getting the best value for money when it comes to their insurance. In the meantime we’ll just have to savour our savings where we can get them ... even if those “savings” are just a slightly smaller price increase than normal.