Poor customer service and protracted delays in processing claims by health insurers are frustrating thousands around the nation, a report has found.

The Office of the Commonwealth Ombudsman received 4,241 complaints and over 1,600 enquiries about private health insurance from 2023 to 2024.

Its 24-page State of the Health Funds Report said the number of complaints increased by nearly a quarter from the previous year.

The most common issues were about how dissatisfied consumers were with the level of customer service, the amount paid for a claim and how long that process took as well as membership problems.

BUPA and Medibank dominate over half of the market among 30 health insurers in Australia, but at a mere two per cent of the market share Defence Health was particularly called out for exasperating its policyholders

It had the dubious honour of representing nearly a third of all complaints received by the ombudsman.

A disastrous IT system overhaul in July 2023 has caused prolonged hiccups with premium payments, claim processing and transfer certificates triggered the ire of policy holders.

Despite the stuff-up, it still was among the best for retaining members at over 90 per cent along with other profession-specific insurers such as Police Health and Teachers Health.

BUPA and Medibank were also not spared scathing assessments with over a third of complaints concerning them both.