In December 2021, the Federal Minister for Health and Aged Care announced that health insurance premiums would increase by an industry-weighted average of 2.70% from 1 April 2022.
With these rises set to commence for some funds early next year, what does this mean for Australians?
According to the Minister for Health and Aged Care, singles will pay an extra $58.24 per year on average, with families looking at an increase of around $135.52* per year.
Our health insurance expert Anthony Fleming says “We know even a small change can have a big impact on household finances.”
“How the premium change impacts you, and when it will commence, will depend on which health fund you are with.”
In fact, your premium might be going up by more or less than the 2.70% weighted average.
The value of health insurance remains more vital than ever, with benefits including:
Plus, you’ll have peace of mind that if something goes wrong for you (or your family), you’ll be well-positioned to get the care you need as fast as possible.
Make sure you regularly review your policy and compare to make sure it’s a good fit, based on your personal needs and circumstances.
You should consider the following steps when your health insurer gets in touch about your rate increase.
Review your current policy to see if it still fits your needs, budget and lifestyle. If you haven't done this in a while, you may find your policy is no longer suitable.
Reconsider services you may not need. Policies bundle up cover for different procedures under one product. This means you might be paying for expensive services you don't need (e.g. birth-related services).
Update your cover. 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, switching to a different policy could make the difference in safeguarding your future health and save you much-needed money.
You will be notified by your health fund via post, email or SMS. This way, you can check over any updated policy information and make an informed decision about what to do next. While rate rises can take effect as early as 1 April 2022, some funds have already flagged their intention to delay their rate rise until later in the year.
Before health funds can raise their premiums, they must submit their proposed increases to the Federal Government for approval.
The Federal Government checks all the proposed increases to ensure they’re sustainable, fair and necessary. Some factors that lead to rate rises include:
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 health insurance premium rate rise is a weighted average, some health funds increase their prices more than others.
This weighted average is based on changes to a health fund’s entire portfolio of policies; this means the cost of some policies may go up a substantial amount, some may increase slightly, some may not go up at all, and some could even decrease.
For over 15 years, the Department of Health has approved private health insurance rate rises. Take a look to see how health insurance rates have changed over the past decade.
| Health insurance rate increase by year | |
| Year of average private health insurance rate rise | Rate rise (%)* |
| 2022 | 2.70% |
| 2021 | 2.74% |
| 2020 (delayed for many funds) | 2.92% |
| 2019 | 3.25% |
| 2018 | 3.95% |
| 2017 | 4.84% |
| 2016 | 5.59% |
| 2015 | 6.18% |
| 2014 | 6.20% |
| 2013 | 5.60% |
| 2012 | 5.06% |
| Total increase | 49.03% |
| * Industry average, as taken from health.gov.au | |
With so many options available and differing levels of cover to choose between, it can be daunting.
Let us help take the stress out of the process with our free health insurance comparison service. You can easily compare policies to see if there’s an outstanding alternative to your existing policy for you and your family.
