Health insurance premiums will increase by an average of 3.95% on April 1

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On the 25 of January 2018, the Federal Minister for Health announced health insurance premiums are set to increase an industry weighted average of 3.95%. This means almost half of all Australians will need to fork out extra to pay for their health insurance policies after April 1.

What does this mean for me?

The specific amount you’ll be affected by after the rate rise depends on your health fund and your type of cover. According to the Minister of Health, on average, a single person will pay an extra $72.80 per year, while a family will pay an extra $143 per year for their health insurance. Currently, the average cost of a family health insurance policy is around $4,040 per year. A singles policy currently sits at around $2,380 per year.

Source: “Lowest private health insurance premium changes in 17 years”, Media Release from Minister of Health, (2018).

Why should I have health insurance?

While increases might seem daunting the value of health insurance is directly related to being on the relevant level of cover for you and your family.

The benefits (provided you have served your waiting periods) include:

  • Choice of doctor
  • Reduced waiting times for surgeries
  • The peace of mind that when something goes wrong for you or your family, you’ll be in the best position to get the right care, as quickly as possible.

How can I avoid expensive private health insurance premiums?

Quite simply, take action by following these four steps:

  • Step 1

    Review your current health insurance policy to see if yours is the most competitive for your needs, budget and lifestyle. If you haven't done this in a while, it's extremely likely your policy is no longer suitable.

  • Step 2

    Cut out services you don't need. Insurers tend to bundle up cover for different procedures in the one policy. This means you might be paying for services you don't need any more (i.e. obstetrics)

  • Step 3

    Update your health insurance. How has your life changed since you took out your current policy? Are you planning on having a family? Or maybe you've recently suffered a health scare. Whatever it may be, comparing health insurance and switching to the most suited policy to your needs means you're effectively safeguarding your health in the future.

  • Step 4

    Pay in advance. If you pay 1 years' worth of premiums up front before prices go up on 1 April you can avoid the rate rise this year.

How will I know if my premium increases?

You will be notified in writing if your health fund is increasing your premium, where you’ll be able to check over the updated policy information. If applicable, your fund should also explain to you why they have increased their premiums above the average rate rise.

Why are health insurance rates going up?

Before insurers can raise their premiums each year, they must submit the proposed increases to the Federal Government to ensure they’re sustainable, fair, and necessary. Some factors that lead to rate rises include:

  • increased hospital costs (including doctors’ charges),
  • an increase in medical equipment and changing technology,
  • the growing number of complex and expensive procedures available in private hospitals, and
  • the growing claim rate against private health insurance

These proposed changes are reviewed, and if the insurer can’t sufficiently justify why they need to increase their premiums, the proposal will be rejected.

As the premium rate rise is a weighted average, some health funds will increase their prices more than others. This weighted average is based on changes to a health funds entire portfolio of policies; this means the cost of some policies may go up a substantial amount, some may increase slightly, and some may not go up at all. For example, in 2018 one provider will raise their premiums by as much as 8.90%, whereas another raised theirs by as little as 2.28%.

For further information, take a look at Why do health insurance premiums increase every year?

A brief history of private health insurance rate rises

For over 15 years, the Department of Health has approved private health insurance rate rises. Since 2010, health insurance has increased by an industry weighted average of 54.6% in total. This means if your health cover costed $1,040 to maintain in 2010 (i.e. $20 per week), it will now cost , on average, $1,671 following the April 1 2018 increase. Take a look to see how health insurance rates have changed over the past decade.

Finding the best policy

With so many options available and differing levels of cover, it can be daunting to compare and find the most suited policy for your needs. We take the stress out of the process by offering a free health insurance comparison service, where you can easily see if there’s a better deal out there for you.

Our health insurance experts are here to help you find the value in your health insurance again. Call them today on 1800 981 019.

Year of rate rise Rate Rise (%)*
Total increase 54.6%
* Industry average, as taken from