Small funds to be spared Labor cap: report

Bill Shorten promised to exclude small health funds from Labor's proposed two per cent premium cap

Federal opposition leader Bill Shorten has reportedly told small health insurers they will not be hit by Labor's proposed two per cent cap on premium increases.

The lobby group which represents 23 smaller health funds met with Mr Shorten in June, when he provided them with "very strong reassurances" that the cap would not be directed at them.

"The Opposition Leader and his office now appear to realise how devastating a 2 per cent cap would be to our sector and that it would perversely drive consolidation with the big, listed health insurers -- who are the real target of the 2 per cent cap policy," chief executive of the Members Health Fund Alliance, Matthew Koce, wrote in the confidential email obtained by The Australian.

The smaller funds mostly cover workers in regional areas and heavily unionised sectors such as nursing, teaching and mining.

The report comes after federal Health Minister Greg Hunt unveiled a new health insurance ratings system to make it easier for consumers to choose a fund.

The minimum hospital treatments covered by the new policy bands - Gold, Silver, Bronze and Basic - will come into place in next April.

Mr Hunt says the system will not lead to a change in prices for procedures, but allows consumers to easily see what their policies pay for.

"For the first time, people will be able to see on a single page what is included and what isn't," he said on Sunday.