Australians with private health insurance are being warned that their premiums are about to increase again, with the Federal Government today confirming another round of health insurance premium increases.

From 1 April, private health insurance premiums will increase by an industry average 3.73%. But it’s vital for Australians to understand that this is just an average and that the actual amount your premiums change will be specific to your health insurer and individual policy. Either way, some Australians will be forking out hundreds of dollars more for their private health insurance.

Compare the Market’s Economic Director, David Koch, said health insurance premiums are usually adjusted annually on 1 April.

“It’s no surprise that these premium increases have been on the horizon, given we usually see health funds adjust their premiums every year on 1 April,” Mr Koch said. “However, this doesn’t mean it’s not going to impact the more than 14 million Australians who currently have some type of health insurance.

“The industry average increase this year is 3.73%, but my advice is not to pay attention to this figure and instead focus on the hike that applies to your specific policy. Your health fund will reach out via post or email shortly to advice what your premium increase will be.

“The last thing I want to see is anyone paying a cent more than they need to for their insurance. Use this announcement as an opportunity to ensure you’re not paying too much for your cover. We see this every year, but you’ll likely be able to find a similar level of coverage elsewhere with a lower price tag. And if your individual policy is increasing by more than 3.73%, it may be time to look elsewhere.”

Mr Koch acknowledged that any premium adjustment amid the cost-of-living crisis would hurt Australians who have private health insurance, but explained there’s a reason why we see premiums increase year-on-year.

“It may seem like a cash grab – but many factors are considered when increasing health insurance premiums,” Mr Koch said. “We all know those doctor fees are creeping up, it’s costing more for the medical equipment used to perform procedures, there’s also a higher treatment and service cost, the wage of healthcare workers is going up and so on. At some point, this cost is going to be passed onto everyday Australians.

“But what people may not realise is there’s a pretty strenuous process all health funds need to go through to get their premiums approved. All health insurers must submit their premium increase proposal to the Department of Health for assessment. These proposals are also assessed by the Australian Prudential Regulation Authority and the Health Minister for final approval.

“There have been cases in the past where these submissions are knocked back and health funds are forced to resubmit a more appropriate plan, so Australians should rest assured knowing there’s a process in place to ensure any price hike is fair and justifiable.”

Source: Department of Health and Aged Care. Delayed indicates where the rate rise was delayed and didn’t occur on 1 April. This was mainly due to the impacts of the COVID-19 pandemic.

Mr Koch said some Australians may see their premium adjustment and ditch cover, but he encouraged them to see if they could maintain it for a smaller price.

“With public waitlists for elective surgery remaining long and the cost of out-of-hospital treatments rising, ditching cover altogether may not be the best idea – especially when there could be a similar policy available with a smaller price tag,” Mr Koch said. “Spend some time seeing if there are ways to save without getting rid of your cover completely. Or you may decide that you want to remove some services that aren’t as important to you, so your premiums remain affordable.

“For example, you may hold a Gold hospital policy which is the most comprehensive level of cover, but switching to a Silver Plus or Silver policy may still cover you for all the inclusions you need, without paying a premium for things you may never need to claim on.

“A common one I see is people paying for extras on their policy that they don’t even use. You may be able to switch to a policy that offers fewer services, but it could be more bang for your buck if you are utilising the extras that are included. Have a tinker around to see if there are ways to save or don’t be afraid to pick up the phone and speak to health insurance professionals at places like Compare the Market, who can help you understand what can otherwise be a complex topic.”

2025 average rate rise by fund.

 Source: Department of Health and Aged Care.

Mr Koch said there were ways to look for better health insurance deals amid the price hikes

1. Sweeten the deal. Many health insurers offer a lot of perks and incentives for members joining before 1 April to give Aussies better value for money when it comes to their health insurance. Be on the lookout for various promotions and offers, including waived waiting periods and free coverage for a set period. These deals can vary between providers, so it’s essential to compare.
2. Cheaper doesn’t always mean better value. If you move to a lower level of cover, it’s likely you’ll have a lower premiums, but also fewer inclusions. It’s important to always consider a policy that caters to your needs.
3. Paying more doesn’t always mean value either. Policies with all the bells and whistles usually boast more inclusions, but they’ll cost you more too. If your health circumstances have changed, you may be able to lock in a lower level of cover that still includes the things you need.
4. Don’t let the thought of resitting waiting periods put you off switching. When you switch health insurance policies, your new insurer recognises all waiting periods you’ve already served. But be aware you will need to wait for any new or upgraded services and benefits (such as if you move up to a higher level of cover)
5. Understand what your policy includes or excludes. Always understand the terms and conditions carefully if you’re considering switching or taking out a new policy. All the details, including inclusions, exclusions, waiting periods, excess amounts, and more, will be found in your policy brochure.

For more information, please contact:  

Phillip Portman | 0437 384 471 | [email protected]

Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.