Hundreds down the drain each year?
The health insurance trap catching out over-50s

Phillip Portman - Author


Written by Phillip Portman

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Older Australians are already being hit from every direction when it comes to the cost-of-living crisis, but many could be paying even more than they should for private health insurance. The worst part is that insurers won’t tell you if you’re paying too much or for cover you don’t even need.

The price we pay in premiums typically goes up every year, and on 1 April, the millions of Aussies with a hospital, extras or combined policy saw their premiums rise by an industry average of 4.41%.

In real terms, that could equate to hundreds more every year, without any extra benefits.

We do not compare all health funds in the market, or all policies from our partner funds. Not all policies or special offers are available to all customers, and some may only be available over the phone or on the website. Learn more.

In this guide
How much more could you be paying due to the 1 April price hikes? The loyalty tax your health insurer won't tell you about Over-50s are being hit hard Is getting rid of cover the answer? Are you on the right health cover?

Paying too much for health insurance?

Step 1: Select your current health fund below.
Step 2: Once you answer a few basic questions, you will have the opportunity to compare quotes from our range of health funds.

Medibank Bupa HCF nib HBF GMHBA Health Insurance Australian Unity GMHBA Health Insurance Defence Health CBHS Other provider

 

The logos displayed are for the top 10 largest health funds by market share in Australia as of April 2026.

How much more could you be paying due to the 1 April price hikes?

While it’s going to vary based on your individual policy and insurer, recent Compare the Market analysis found that someone with an average hospital policy of $2,641 who was hit with a 4-5% increase could pay between $105.60 and $132 more annually.*

For someone with an average combined policy with hospital cover and extras costing $3,560, a 4-5% increase would add $142 – $178. That’s not loose change, especially when dealing with rising costs across the board.


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The loyalty tax your health insurer won’t tell you about

Older Australians who stay with the same insurer may think they’re being rewarded for their loyalty, but that’s rarely the case.

Every year, we see insurers trying to wow new customers with perks, rewards and incentives, but loyal, long-term customers are usually exempt from these promotions. What’s more is the insurance companies aren’t going to tell you if you’re paying more than you need to or if you’re holding cover for things you’ll never utilise. Many seniors, who maintain gold cover “just in case”, could be paying for services like pregnancy that they’ll never claim on.

Over-50s are being hit hard

While the official industry average increase sits at 4.41%, that figure masks a reality that many over-50s are actually facing.

Some of the biggest health funds increased prices well above the average, with the impact often more noticeable on higher cost hospital policies like Gold and Silver Plus.  The largest average premium increase is AIA with a 5.98% average, while the smallest is 1.98% with GMHBA.

Data from Compare the Market’s Household Budget Barometer 2025 indicates that Australians who had remained with the same health insurer for more than a decade were paying an average of $306.88 per month in premiums. By contrast, those who had taken out cover within the past year reported average monthly premiums of $237.84.

The $69.04 monthly gap equates to an annual difference of $828.48, meaning long‑term customers were paying around 29% more on average than recent switchers.

 

Are you paying too much?
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Is getting rid of cover the answer?

Over the last decade, the overall industry average for health insurance premiums has risen every single year. In fact, the average for premiums has increased nearly 35% from a decade ago.

Holding health insurance can still be valuable – especially for older Australians. Public waitlists can often be months for some elective surgeries, and holding private health cover can mean you get treatment sooner rather than later.

You shouldn’t cut back on services you require, but instead look for cheaper alternatives. Sometimes a lower tier policy can offer similar services.

One family paid $3,750.36 less per year by switching from Gold to Silver Plus hospital cover, increasing the excess and changing extras to a policy better suited to their needs.**

The best part is that you don’t need to worry about having to re-sit waiting periods, as switching to the same level of cover or lower maintains your quality and continuity of cover.

*Averages based on policies purchased via Compare the Market between January and November 2025. Figures include rebates and age-based discounts as well as lifetime health cover loading where applicable.

**Disclaimer: Premium Reduction based on family living in Qld, switched on 31/3/26. Silver Plus hospital with Extras. Includes Base Tier Australian Government rebate with no Life time Health Cover loading. Premium reduction based on lowering hospital cover from Gold to Silver Plus, increasing the excess and changing extras to a policy better suited to their needs, and may change with future rate rises.