Sneaky MAJOR health insurance rise approved: Here’s how to beat it
Health Minister Mark Butler has approved an average increase of 3.73% to health insurance premiums as of April 1 – the biggest increase in 7 years.
The increase is well above inflation, which was 2.5% in January this year, and will impact the 15 million or so Australians who pay for private health insurance.
In announcing the increase, The Hon Mark Butler MP, Minister for Health and Aged Care said that after asking insurers to resubmit their claims 3 times.
"Considering their years of record profits", he added, the Government has approved an average industry premium increase of 3.73%.
Health insurance hikes of 3.73% approved – how much more will you pay?
The average* cost of silver (mid range) private health insurance for hospital cover is around $154 per month for a single person, according to Finder data.
Based on this average, an increase of 3.73% would see this rise to $160 per month – an extra $72 a year.
This premium hike is around half of the rise that some health funds had lobbied for – but is the highest the federal government has approved since 2018.
In 2024, the average increase was 3.03%, and in 2023 it was even lower at 2.9%.
The increase might be hard to swallow for Aussies who are sick of paying more for everything. In recognition of this cost of living fatigue, the Minister also said that insurers must "ensure their members are getting value for money and that premiums are contributing to system-wide improvements, like higher wages for nurses and other health workers and sustainable hospital services".
Bow can you beat the price increase?
While the approved rate of 3.73% is an average, keep in mind that the individual amounts each insurer passes on to customers could be lower or higher.
Legally, the health funds have to give you "reasonable notice" of a price rise.
Translation: you'll probably get notice of the price rise before it takes effect. So you have time to compare your options and try to get a better deal.
You have a few cards up your sleeve, so you could:
- Pay 12 months of premiums in advance – if you're in the fortunate financial position to do this before April 1, you'll pay based on the current rate for the year ahead and avoid the increase.
- Compare your options – every insurer prices risk differently, so you could be paying more right now for the exact some cover that another insurer offers for much less. Comparing takes just a few minutes and could save you a tidy amount of money.
- Get rid of your extras cover – extras doesn't count towards your tax exemption, so do a quick audit and check which extras you actually use. If you're not getting more value than you're paying, consider nixing it. For example, if you pay $50 a month for extras, that's $600 a year, so you want to make $600+ worth of claims to make sure you're coming out ahead.
* Average prices updated February 2025, in line with Finder's database of health insurance policies. Prices are based on a single individual with less than $97,000 income and living in Sydney with a $750 excess.
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