The country's largest health insurer, Southern Cross, is calling for tax breaks for people who take out private health insurance.
Figures released on Sunday by the Southern Cross Health Society show the average cost of claims jumped 10% last year, while the number of claims is rising even more sharply.
Southern Cross Healthcare chief executive, Dr Ian McPherson, says the not-for-profit society is paying 96 cents in claims to members for every $1.00 they pay in premiums.
He says health insurance is in danger of becoming unaffordable unless the Government cuts fringe benefit tax for companies offering cover to workers, and gives tax rebates for older people with private insurance.
Health Minister Tony Ryall says National was considering rebates for health insurance for the over 65's before the last election, but scrapped it because of the financial crisis.
He says the Government has increased elective operations in public hospitals.