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Health insurance costs rise: Premium rates skyrocket for millions of Aussies, here is the damage to you

Health insurance premiums will rise 3.03 per cent on April 1.

Aussies will be hit with the biggest price hike to private health insurance premiums in five years, the federal government has confirmed. Premiums will increase by 3.03 per cent, on average, with federal government approval, and will come into effect from April 1. This is higher than the 2.9 per cent increase policyholders were dealt in 2023 and marks the highest increase since 2019.

Singles can expect to pay an extra $81 per year with the average increase, while families will have to fork out an extra $153 per year for cover. Many insurers also chose to increase beyond the average, which puts a bigger financial strain on their customers.

You can check out the details in the table below, or see 10 tips to reduce the burden of this year's hike here.

Do you have a story to share? Contact tamika.seeto@yahooinc.com

Medibank, Bupa, HCF: Insurers pass on insurance premium hikes

Health insurers have now started announcing their premium rises, with some higher than the average.

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Medibank premiums will increase by 3.31 per cent, Bupa premiums will go up 3.61 per cent, nib premiums by 4.10 per cent and HBF premiums by 3.95 per cent, on average. HCF premiums will increase by 2.89 per cent - less than the average.

Compare Club found that Aussies with one of these "Big Five" health funds would actually pay an average increase of 3.57 per cent. This adds up to an extra $96 for singles and $181 for families.

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The CEO and managing director of nib, Mark Fitzgibbon, said the increase reflected the return of hospital and extras treatment post COVID-19, and a rise in health and treatment costs.

“We’re doing our very best to maintain affordability yet spending is growing across health care, driven by an ageing population, the rise of chronic conditions and the cost of new technologies,” Fitzgibbon said.

Bupa health insurance managing director Chris Carroll acknowledged many households were under "real pressure".

“We want our members to know we’re working hard to help ensure they continue to have access to affordable and high-quality healthcare. Bupa’s premium adjustment this year is lower than inflation and less than rising healthcare costs," Carroll said.

5 worst health insurance increases

  1. CBHS Corporate Health (5.82 per cent)

  2. CBHS Health Fund (4.51 per cent)

  3. nib (4.10 per cent)

  4. HBF Health (3.95 per cent)

  5. Health Insurance Fund of Australia (3.87 per cent)

5 best health insurance increase

  1. Defence Health (1 per cent)

  2. Australian Unity Health (1.42 per cent)

  3. Peoplecare Health (1.63 per cent)

  4. Health Partners (1.93 per cent)

  5. Queensland Teachers' Union Health Fund (1.96 per cent)

Insurance increase not higher than wages or inflation

Health Minister Mark Butler said the premium rise was below the annual rise in wages, pensions and inflation. Wages rose by 4.2 per cent and inflation by 4.1 per cent in 2023. Social security payments have increased in line with inflation.

Butler rejected initial proposals from the industry in December, with planned increases believed to be as high as 6 per cent.

Health insurance costs
Nearly 15 million Aussies will be hit with a health insurance price hike from April 1. (Source: Getty)

"I wasn't prepared to just tick and flick the claims of health insurers, as the opposition asked me to do," Butler said.

"I asked insurers to go back and sharpen their pencils and put forward a more reasonable offer for the 15 million Australians with private health insurance."

Butler acknowledged “any increase will be hard to bear during a global cost-of-living crunch” but said the government ensured premiums would fall relative to wages.

Consumer advocacy group CHOICE recently called out health insurers for using "sneaky tactics" to increase the cost of their health insurance, including closing policies and releasing new, more expensive policies with the same cover.

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