The means testing of the private health insurance rebate might be the best thing that's happened to the industry and its members in a long time. It has probably focused the industry's mind on fighting for customers instead of enjoying government subsidies and above-inflation premium rises.
The regulator, the Private Health Insurance Administration Council, says the profitability of the private health insurance market in recent years has been "generally high by historical standards", with net margins of between 3 per cent and 6 per cent and returns on capital of between 10 per cent and 30 per cent among for-profit insurers.
And government carrots and sticks - customer refunds of up to 40 per cent of the cost of the product, and charges to push the young and well-paid into memberships - partly explain why 12.6 million Australians have some cover.
The insurers complained means testing would lead to product downgrades and cancellations. While it's still early to judge the effect of means testing, UBS healthcare analyst Andrew Goodsall says there has been a "switch to lower-cost, restrictive policies and a deterioration of industry underwriting margins".
The question is whether tougher times for insurers lead to worse health outcomes for people, or a blowout in the health budget.
The industry forcefully argues the insurance rebate - costing $5.56 billion in the 2013 financial year, one of the biggest items on the federal budget - is worth it, because otherwise the public system would be overwhelmed and its costs would explode.
But the rebate needs to hold its own against compelling claims to the health budget. Ditto household budgets. And insurers, which reported a 10 per cent jump in profit before tax and a 7.5 per cent rise in premium revenue in the year to March, have had a good run.
Take disclosure. Chances are, you don't know how much your health fund's executives and directors are paid, except if your insurer is listed on the sharemarket or government-owned such as NIB or Medibank.
And you don't have detailed information on how the fund's money is spent, or whether your fund has rejected a merger proposal, or whether directors have been using members' funds to attend a conference in Brazil. Even conceding that most people don't care, good luck to the curious minority.
Then there's competition.
Beyond last year's entrance of health.com.au, backed by comparison site iSelect, there have been precious few new insurers. This lack of new entrants, plus product complexity and low levels of customer transfer, leads the Private Health Insurance Administration Council to say Australia lacks "full and unbridled competition".
But what the industry lacks in new insurers, it makes up for in policies - 25,700 products from 34 insurers. The regulator says this equates to "an average of about 100 different policies per insurer in each state or territory".
Many healthcare workers and people familiar with the health system don't buy insurance, choosing instead to pay on a needs-basis or ring around for the best price before committing to a procedure.
They argue the cost of insurance - taking into account waiting periods, policy restrictions and exclusions, out-of-pocket payments and "excess" fees - exceed the cost of ambulance cover, a yearly dental check-up, perhaps some allied health, even an accident.
It's an approach noted by consumer group Choice, which recommends people weigh up what they spend on ancillary services such as dental, physiotherapy, and medicines over the course of the year, and the maximum they can claim from extras cover.
"If you can set aside this amount for non-hospital health services, you could be better off self-insuring rather than paying a premium," it said in a report last month.
Carol Bennett, the chief executive of the consumer lobby group Consumers Health Forum, says despite attempts to simplify the industry over the past few yers, many members feel aggrieved.
"They say they've paid a substantial amount of money over a long period of time, only to face big out-of-pocket bills when they try to claim at a vulnerable time," she says.
Choice says Australian patients contribute 20 per cent to the cost of healthcare, through out-of-pocket payments, well above the percentage paid in the US and Britain. Insurers contribute just 8 per cent, it said, and the government picked up the tab for 68 per cent.
Many people say their insurance has pushed them up the queue for certain procedures and helped them in the trickiest of situations.
But the industry needs to go beyond the self-serving mantra that higher levels of coverage is a national good, and focus on members, products and prices.
The Private Health Insurance Administration Council has a comparison site for the public, covering all insurers and all their products. I typed in my details and what sort of cover I wanted, and could not find one to fit the bill.
Number of Australians with some form of health cover
The cost of the insurance rebate for the federal government in the 2013 financial year
Jump in profit before tax reported by insurers in the year to March
Rise in premium revenue reported by insurers in the year to March
Number of health insurance policies available
(from 34 insurers)