Health insurance price hikes higher than ever: What you’re really paying
A CHOICE analysis shows that Australians with private health insurance will be hit by increases of up to 25% when price rises come into effect on 1 April.
A CHOICE analysis of the big five health funds (Bupa, HCF, HBF, Medibank, NIB) shows that some Australian consumers will be hit with price increases well above the government-approved average increase of 4.41%
HCF customers with a Gold-level policy are facing a 25% increase in the cost of their health insurance – that’s over five times the advertised average
The latest hikes mean that the price of Gold cover across the five big funds has increased on average by 71% in five years. CHOICE experts say this points to a creeping affordability crisis in health insurance, where Australians will be increasingly unable to afford comprehensive top-level cover
As the cost of living continues to bite, Australians are facing another increase to the price of health insurance, with the largest average hike in premiums we’ve seen since 2017 coming into effect on 1 April.
Minister for Health and Ageing Mark Butler announced the 4.41% average premium increase to the price of health insurance policies in February.
But CHOICE experts say that the advertised average increase does not tell the full story, and does not reflect the true price rises many Australians will face, particularly those with top-level Gold insurance, which covers things like pregnancy, psychiatry services and joint replacements.
“The average increase to premiums of 4.41% is just that – an average,” says CHOICE health insurance expert Mark Blades. “It’s useful for understanding how much taxpayers increasingly spend to subsidise health insurance – which is now at $7.9 billion – but it’s of very little use to consumers.”
“Our research has found that there is a huge difference between the increases consumers will face, depending on the level of policy they hold.”
Mark says that while some Australians will face no price rise, a CHOICE analysis of policies available for sale shows that the cover for Gold policies across the largest five funds will rise in price by an average of 13.3%, while those on Basic, Bronze and Silver policies will face increases from 2.6% to 3.3% on average.
HCF has biggest Gold-level price rise of main funds
Of the big five funds, HCF has the largest increase of 25% (more than five times the average of all policies) to its Hospital Optimal Gold cover in all states and territories. This policy was already one of the most expensive, and requires policyholders to also take out an Extras policy.
Of the big five funds, HCF has the largest increase of 25% to its Hospital Optimal Gold – more than five times the average of all policies
In NSW, often the most expensive state, the smallest increase to a Gold policy was by HBF at 7.9%. HBF customers in Western Australia, where HBF has its largest member base, will also cop the 7.9% increase.
Average increases to cost of Gold policies by fund:
Top cover increasingly unaffordable, up 71% in five years
CHOICE experts looked back over the increases to the price of health insurance for the past five years.
Despite the average ‘government-approved’ cumulative increase of 14.8% in this time, prices for Gold cover across the five biggest funds (Bupa, HCF, HBF, Medibank, NIB) has actually increased by a massive 71.1%.
A single person in NSW comparing comprehensive Gold cover in 2022 from the largest five funds could find cover at $257/month, or $3080 a year.
After the price rise in April, the same Gold cover will cost on average $439/month, or $5270 a year.
Practice of phoenixing has disguised price rises
Mark says that Gold policy ‘phoenixing’, where insurers have closed older policies to new members and open new identical policies with the same name at a higher price, is partly to blame for the huge price increase.
“The good news is that federal legislation outlawing the sneaky ‘phoenixing’ loophole used by insurers was introduced in February, but we’re still seeing the trend that top-level cover is becoming increasingly unaffordable for Australians,” he says.
The significant rise in the price of Gold-level coverage has caused a notable drop in the number of Australians with comprehensive level cover: from 39% in 2020 to 28% at the end of 2025.
Many Australians drop their insurance to a lower level to avoid being ‘over-insured’ for cover they’re unlikely to use – for example, pregnancy and IVF services. However, CHOICE consumer surveys consistently show the cost of private health insurance is a top concern for household budgets.
The significant rise in the price of Gold-level coverage has caused a notable drop in the number of Australians with comprehensive level cover
Mark says Australians should look out for communication from their fund about the price increase to their policies. He notes that a range of different cost increases will apply to individual policies.
“If you’re able to prepay for 12 months before your fund increases the price, you can make some good savings and delay the 2026 price increase, but this isn’t possible for many Australians.”
The problem with private health insurance in Australia
Insurers, especially nonprofit funds, set prices based on their costs. But transparency is important, especially in an area such as healthcare where potentially sick and vulnerable people need to be able to rely on their health insurance.
“When there is such a considerable difference between the highly publicised average premium increases and the reality of the higher prices affecting a range of Australians, it hinders people’s ability to make informed choices about health insurance,” says Mark.
Top-level Gold cover is designed for the many Australians who have specific high-level needs … Often these are the people who can least afford higher premiums
Top-level Gold cover is designed for the many Australians who have specific high-level needs, such as management for mental health conditions or care in a palliative or rehabilitation facility. Often these are the people who can least afford higher premiums.
Taxpayers fork out almost $8 billion annually to private health insurers in rebates, and many Australians are encouraged to take out ‘junk’-level cover to avoid the Medicare Levy Surcharge. In return, private health insurance is meant to complement the public system through relieving pressure and offering an affordable option accessible to many.
Instead, Australian taxpayers are propping up an industry with increasingly unaffordable insurance policies and with more exclusions than ever.
Pru Engel is the Audience and Engagement editor at CHOICE. Her job is to ensure as many Australians as possible know about the great work we do at CHOICE.
She works closely with our testers and experts to find the gems of information in our data and research that will resonate with Australian consumers and help them make the best decisions, whether they're purchasing an air fryer, looking for a new mattress or trying to find the cheapest car insurance. She also helps to drive meaningful change for consumers by collaborating with our Campaigns team on content covering issues such as grocery pricing, product safety and scams.
Prior to CHOICE, Pru worked as an editor at many of Australia's leading food and lifestyle titles.
Pru has a Bachelor of Arts in Communication (Journalism) from the University of Technology, Sydney.
Find Pru on LinkedIn.
Pru Engel is the Audience and Engagement editor at CHOICE. Her job is to ensure as many Australians as possible know about the great work we do at CHOICE.
She works closely with our testers and experts to find the gems of information in our data and research that will resonate with Australian consumers and help them make the best decisions, whether they're purchasing an air fryer, looking for a new mattress or trying to find the cheapest car insurance. She also helps to drive meaningful change for consumers by collaborating with our Campaigns team on content covering issues such as grocery pricing, product safety and scams.
Prior to CHOICE, Pru worked as an editor at many of Australia's leading food and lifestyle titles.
Pru has a Bachelor of Arts in Communication (Journalism) from the University of Technology, Sydney.
Find Pru on LinkedIn.
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