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Private health premiums to go up in April

The lowest increase in 20 years - but still above the rate of inflation.

Last updated: 29 December 2021


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

Need to know

  • Health insurance premiums will go up on 1 April
  • The average increase is 2.7%, although some funds will increase prices more, including several large insurers
  • The health insurance rebate rate will also be adjusted on 1 April 2022

Most health insurance premiums will increase on 1 April 2022 by an average of 2.7%. It's the second consecutive year of the lowest average annual increase since 2001 but some funds will have bigger price hikes than others: the lowest increase will be Health Care Insurance with 1.09%, while CBHS Corporate will have the largest average increase for the second year in a row with a 5.33% price hike on average across their policies. 

Several big insurers announced above-average increases, but some, such as Medibank, will delay the price increases to later in 2022. Your health fund lets you know your policy's actual increase early in the year, before the increase takes effect. If you can afford to pre-pay a full year's premium, you can do that before April to lock in 12 months of cover at that year's prices.

Health insurance costs are growing faster than inflation

Despite the lowest increase in two decades, health insurance premiums are still growing quicker than wages or inflation, raising concerns that affordability is spiraling out of control.

"This year's premium price hike made people question their need for expensive health insurance," says CHOICE senior campaigner Dean Price.

"The average increase may be lower than other years but people should check how much their specific policy went up as it will vary. Some funds had average increases of up to 5.33%."

Premiums have increased by 54% in the last decade, while the consumer price index (a measure of inflation) grew only 20%.

"The federal government needs to take real action to address issues that industry is unwilling or unable to fix themselves – we need a full review of the private health system," says Price.

"People can shop around and lock in a price if they pre-pay before 1 April each year, but that is a short-term solution when people have been crying out for real action on price and value."

Rebate cuts mean the price hike is bigger than it looks

While the average premium increase gets a lot of attention, your premium increased on April 1 2021 for another reason: a reduction in the private health insurance rebate, and it may happen again in 2022.

In 2021 it dropped by about half a percentage point, to 24.6% for under 65s on the base tier income. Older people and wealthy households will receive different rebate amounts.

The rebate amount decreases every year on the same day premiums go up. It was frozen for 12 months at the beginning of 2020 due to the pandemic.

The actual size of the cut is determined by how much premiums increase compared to the rate of inflation: the bigger the difference, the more the rebate goes down.

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