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Sky-high increases to the cost of health insurance hitting Australians hard

Health insurers HBF and HCF raised prices of some premiums by 15%.

Last updated: 21 May 2024


Checked for accuracy by our qualified fact-checkers and verifiers. Find out more about fact-checking at CHOICE.

Need to know

  • Many Australians were hit with an above-average increase to their health insurance costs in April – well above the advertised 3.03%
  • On average, customers of the big health insurers had the largest price increases, while restricted membership funds had the lowest increases
  • Gold policies had the highest premium increases, with average increases above 10% by HBF, HCF, Australian Unity and HIF

The increasing cost of private health insurance is yet another household expense putting pressure on Australians. 

The annual average industry-wide price increase of 3.03% was announced earlier this year by the Minister for Health and Aged Care, which means that since 1 April, Australians are paying even more for their health insurance. 

And in many cases, policyholders are paying substantially more than the advertised average increase, in some cases by as much as 17%.

"We've analysed the price increases applied by each fund and found that, in many cases, prices have increased well over 3.03%," says CHOICE health insurance expert Uta Mihm

"Of the over 24,400 hospital and combined hospital and extras policies in our database, only 29 policies (0.11%) had an increase of exactly 3.03%, which means that many Australians are now paying substantially higher monthly costs for their health insurance. The policy with the largest increase went up by over 17%."

"Of the over 24,400 hospital and combined hospital and extras policies in our database, only 29 policies (0.11%) had an increase of exactly 3.03%

And although there are some funds that have advertised lower average increases, such as HCF at 2.89% (the lowest average increase of the big health funds), there are cases where individual policies for those providers have increased substantially more. For example, HCF's Hospital Premium Gold policy with $250 excess increased by 15%, which is more than five times the average HCF increase.

HBF Gold policyholders also faced similarly large increases. While the fund's average increase is 3.95%, HBF Gold Elevate policyholders in Victoria now pay 15% more. 

"With many Australians struggling with the cost of living, it's a good idea to review how much your health insurance has gone up by to see if you can switch to get a better deal," says Uta. 

You can compare thousands of policies from 49 different providers using CHOICE's independent health insurance comparison tool to see if you can make any savings. Policies with the same level of cover can often cost hundreds of dollars less.

CHOICE members with above average health insurance increases

Many CHOICE members contacted us and told us about getting hit with an increase well above the 3.03% average.

  • Annie is with AHM and on a Bronze policy with extras and received a 9% increase.
  • Jeff has noticed that his HCF top cover policy had a number of years with above average increases, and this year he is paying about 6% more – well above the HCF average increase of 2.89%.
  • Nick was on a top cover policy with Health Partners, but he switched insurers after being slugged with a nearly 10% premium increase.

It's a good idea to review your health insurance policy at least once a year, especially just after a premium increase. 

Which health insurance policies had the largest increases?

The health insurance policy with the largest increase of over 17% was a top cover policy in Western Australia: Gold Complete Hospital ($750 excess) from Australian Unity.

In New South Wales, Gold policies had the largest premium increases of 6.7% on average, while Basic policies had the smallest increases at 2.1%. 

This comes after Gold policies already increased by 30% on average in the past three years. The average Gold family premium across Australia now costs $7750 per year, up by $360 from March, making Gold policies less affordable than ever.

The funds with the largest increases in Gold policies were:

  • HBF – 15%
  • Australian Unity – 13%
  • HCF – 12%
  • HIF – 11%
  • St.Lukes Health – 9.9%
  • AHM – 9.9%
  • Union Health – 9.9%
  • NIB – 9.2%.

Note: Figures are based on single hospital premiums (all excesses) available for sale in New South Wales, except for HBF where we looked at policies in Western Australia.

How do health insurers set their premium increases?

What we call health insurance benefits, insurers call risk. And insurers look at their members' claims and increase premiums accordingly. 

While you might pay more for your car or home insurance in the year after a claim, health insurance works a little differently. Health insurance is community rated, so all members on the same policy pay the same premium. This means the claims of all customers on the policy are taken into account when determining price increases.

To set their premiums, health insurers divide members on the same policy into different groups, such as people from different states, those with different excesses, and different membership types (like singles and families). Insurers then review the claims for each of those groups.

The average Gold family premium across Australia now costs $7750 per year, up by $360 from March, making Gold policies less affordable than ever

So that means if other people in your group have large claims, your premium will go up even if you've held that same policy for decades without ever making a claim.

Different premium increases can apply to the same policy in a different state, different excess or membership type. For example, looking at a single policy:

  • Medibank Silver Plus Advanced ($500 excess) members in Tasmania are now paying 3.4% less, while members in Western Australia are paying 1.8% more.
  • Bupa Silver Plus Essential ($500 excess) members pay around 3.8% extra, while the premium stayed the same for policyholders of the same policy with a $750 excess.

Health insurers rely on their members staying with them even after this year's large increases, but it's time to beat them at their own game and compare health insurance so you can score a better deal.

We care about accuracy. See something that's not quite right in this article? Let us know or read more about fact-checking at CHOICE.

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