What affects health insurance premiums?

Average customer rating: 4.3/5
Written by Joshua Malin
Reviewed by Steven Spicer
Updated 19 March, 2024

Expert tips on health insurance premiums

Our health insurance expert, Steven Spicer, has some tips on how to keep your health insurance premiums low and get as much value as possible from your cover.

Steven Spicer
Executive General Manager – Health, Life & Energy

Review your health insurance regularly

The great thing about private health insurance is that you can upgrade or downgrade your policy at any time as your health needs change. Any waiting periods you have already served will be recognised by your new fund. Just keep in mind that you will need to serve any relevant waiting periods for any new or upgraded services or benefits. Anything you have paid in advance will be refunded to you as well, so review your health insurance regularly.

Choose your excess

While paying a lower premium may be tempting, cheaper doesn’t necessarily mean better. Instead of sacrificing inclusions on your cover, consider increasing your excess to lower costs. Just keep in mind that to be exempt from the Medicare Levy Surcharge, the excess must not exceed $750 for singles and $1,500 for couples/families.

Pay attention to your premium increases

Private health insurance premiums usually increase on the 1st of April every year. By paying your premiums annually, you may be able to save paying up to 12 months in advance to enjoy a lower premium price, provided you don’t make changes to your policy during the period you’ve pre-paid.

Your Age

Does age affect health insurance premiums?

Lifetime Health Cover loading

The age-based discount

Your Income

Depending on your taxable income and age, you may be eligible to receive the Australian Government’s Private Health Insurance Rebate. The rebate is currently tiered by income and age brackets, ranging from 8.202% to a maximum of 32.812%.

You’re eligible for the Private Health Insurance Rebate if:

  • You have a Medicare card
  • You’re insured through a registered health fund
  • Your annual income is less than $151,001 as a single or $302,001 as a couple
  • You’re an Australian citizen, permanent resident, or have a reciprocal Medicare card.

People in lower income tiers and higher age brackets will receive a more substantial rebate.

If you’re eligible for an Australian Government rebate, you can either claim it back at tax time or through a reduced premium. To claim the rebate as a reduced premium, you will need to supply your insurance provider with your age and predicted income bracket. Keep in mind that if you claim in the wrong tier, an adjustment will be made at tax time.

If you’re a high income earner who doesn’t have private hospital insurance you might have to pay the Medicare Levy Surcharge (MLS). This surcharge is intended to ease the pressure on the public system by incentivising higher earners to take out hospital insurance. The table below outlines the income tiers and the MLS percentage they’ll have to pay come tax time.

 Medicare Levy Surcharge – Income Thresholds
Surcharge 0% 1% 1.25% 1.5%

Under $97,000

($0 payable)

$97,001 – $113,000

(~$970 – $1,130 payable)

$113,001 – $151,000

($1,413 – $1,888 payable)


(~$2,265+ payable)


Under $194,000

($0 payable)

$194,001 – $226,000

(~$1,940 – $2,260 payable)

$226,001 – $302,000

($2,825 – $3,775 payable)


(~$4,530+ payable)

Retrieved from the Australian Taxation Office | Information current from 1 July 2024. Dollar amounts payable are rounded up.

^For families with children, thresholds increase by $1,500 for each child after the first. Families include couples, de facto couples, and single parents.

Your chosen policy

The policy you select will be the greatest determinant of price, as policies can range from basic (budget policies) to comprehensive (most costly).

The different levels of cover are generally determined by the services and procedures that are included or excluded, so it’s vital you regularly assess what you need cover for and tailor your policy accordingly.

For example, if you have a top-level health insurance policy (like a Gold policy), you will pay a higher premium than you would for a lower level of cover. This is because these comprehensive policies generally cover most services/treatments that Medicare pays a benefit towards, such as obstetrics, joint replacements, assisted reproductive services and many more.

Conversely, a Basic policy will cost less due to fewer of those treatments/services being available for you to claim on.

Your family status

Who your policy covers also affects the price of your premium. Here are the types of polices available, who they cover and how they will affect your total health insurance cost:

Singles policy

Couples policy

Family policy

Single-parent policy

Other factors

Along with the level of cover you select and who is covered by your policy, these other factors may impact your premium.



Where you live

Annual premium increase

Meet our health insurance expert, Steven Spicer

Steven Spicer
Executive General Manager – Health, Life & Energy

As the Executive General Manager of Health, Life and Energy, Steven Spicer is a strong believer in the benefits of private cover and knows just how valuable the peace of mind that comes with cover can be. He is passionate about demystifying the health insurance industry and advocates for the benefits of comparison when it comes to saving money on your premiums.