Read on to find out why premiums keep rising, how much some of the key providers in Australia have increased their premiums this year, and how to prepare financially for the increased costs.
Health Insurance premiums generally rise to cover rising costs of providing health care, increased use of certain health services, or a combination of the two. More specifically, rising premiums can be caused by increased wages for doctors, nurses and hospital staff, or increased costs of medical equipment and technology.2
Under the Private Health Insurance Act 2007,3 Health Insurance providers have to submit details of any changes they want to make to the Federal Minister for Health and get them approved before they can increase their premiums.
Health Insurance premium rises are not consistent across the industry. Your individual premium increase will depend on your Health Fund and which insurance policy you’ve taken out with them.
In 2023, the industry average rate rise was 2.9%.4 But keep in mind, 2.9% was an average only, with some individual policies rising by much more than that and others less.
2023 Premium increases of key Private Health Insurance Providers in Australia5
|Provider||2023 premium rise|
Premium rises are generally unavoidable, but you can still be proactive about preparing for them.
Your provider will notify you about the premium rise by post, email or SMS, and this should be your prompt to compare your options. The window before the rise comes into effect can be a great time to review your coverage.
Have your needs changed since you last reviewed your coverage? Does the coverage you’re getting still make sense for you at the new price? How does your current policy compare to what else is out there?
Given that not all providers raise their premiums by the same amount, shopping around for a different policy could end up saving you money.
Some providers allow customers to prepay up to 18 months in advance.6 If you can afford to pay the lump sum up front, prepaying effectively preserves your rate for up to another year or year and a half. It’s also usually worthwhile to check whether your provider offers a prepaying discount, which could save you even more.
The government’s Private Health Insurance Rebate is a contribution the government makes to the cost of your Health Insurance.7 The amount of the rebate is adjusted each year using something called the Rebate Adjustment Factor. The calculation takes into account the industry weighted average premium increase as well as the Consumer Price Index.8
Unfortunately, that doesn’t necessarily mean that rebates increase at the same rate as premiums. In 2023, for example, the Rebate Adjustment Factor was calculated as 1,9 which means the rebate will stay the same even though premiums have gone up an average of 2.9%.10
If it’s time to start reviewing your Health Insurance options, we’re here to help. We’ve partnered with a variety of providers to help you easily compare Insurance Policies online*. Or if you prefer, give our friendly team a call on 1800 784 772.
We’d be happy to help you find a policy that suits your unique needs.
1 Australian Government | Department of Health and Aged Care – Average annual price changes in private health insurance premiums
2 Commonwealth Ombudsman – Health Insurance Premium Increases
3 Australian Government - Private Health Insurance Act 2007
4 Australian Government | Department of Health and Aged Care – Average annual price changes in private health insurance premiums
5 As above
6 HCF – FAQs on your premium changes
7 Australian Taxation Office – Private health insurance rebate
8 Private Healthcare Australia – Australian Government Private Health Insurance Rebate
9 Department of Health and Aged Care – Private health insurance rebate adjustment factor effective 1 April 2023
10 Department of Health and Aged Care – Average annual price changes in private health insurance premiums
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