Members Health says its insurers are considered the sector's industry superannuation fund equivalent.
Members Health represents the 25 private health insurers that are not-for-profit and member-owned. Its funds provide private health insurance to over 1.7 million Australians.
It said data from the prudential regulator showed its members have been growing by more than double the industry average.
Members Health funds grew by 2.7 per cent over the 12 months to June 2018. Membership of the rest of the sector declined by -0.18 per cent.
“The growing popularity and success of the Members Health funds is not a surprise,” said Members Health Fund Alliance CEO Matthew Koce.
“As a group, participating Members Health funds consistently record customer satisfaction scores of 96 per cent or higher. Why? Because they return more to policyholders in benefits instead of generating dividends for shareholders or overseas investors.”
Mr Koce warned against further industry consolidation, saying it “would be disastrous for consumers”.
“In private health insurance, we have not seen anything even close to the sort of situation that followed the privatisation of the Commonwealth Bank,” he said.
“A situation in the banking sector where market power is vested in the big four banks is the last thing anyone would want in private health insurance.
“A competitive and diverse marketplace provides the best possible protection for consumers and it is important that the lessons of consolidating the banking and finance sector are learned and not repeated elsewhere.”
Mr Koce said Members Health was optimistic about the sector reforms to be implemented in 2019.
“Right now we are preparing for even more growth following the Government’s reforms, which will bring new standardised clinical definitions and product categories that will make it easier for consumers to shop around, compare products and get the best value from their health insurance.
“It will also allow health funds to offer youth discounts and travel and accommodation cover for policyholders in rural and regional areas who need to access care outside their local community.
“We anticipate that these consumer focused reforms will drive significantly increased private health insurance participation as Australians seek to access the excellent care available through private hospitals and avoid the long and arduous public hospital waiting times that can run into the months and years.”