Millions of Australians are set to pay hundreds more annually for their private health insurance, with the Federal Government today confirming the biggest round of health insurance increases since 2017.

From 1 April, private health insurance premiums will increase by an industry average 4.41%.

The average increase has come in above the rate of inflation, as funds grapple with rising treatment costs and industry pressures.

The biggest is AIA with a 5.98% average, while the smallest average is 1.98% with GMHBA.

But with huge differences between funds and policies, Compare the Market is encouraging members to compare cover options, to look for similar or better value for less.

Compare the Market’s Economic Director David Koch urged Aussies not to get too distracted by the headlines.

“When your premium update hits your inbox, run a comparison. Check and see how you’ll really be affected, then use the average as a benchmark to see if you’re getting a rough deal. If your fund’s increase is above average, it may be time to shop around for better value.

Aussies who stay loyal to their health insurer may be paying for the privilege, according to Compare the Market’s Household Budget Barometer.  Survey respondents who had been with the same health insurer for over a decade spent 29% more on premiums on average compared to people who had joined their fund less than a year ago.

Mr Koch said the message to consumers facing pricing pain was clear: switch – don’t ditch – your cover.

“If having cover is important to you, look for cheaper options. Remember, you don’t need to re-sit any waiting periods you have already served if you’re changing to the same level of cover or below,” Mr Koch said.

“When public waitlists can be months for some elective surgeries, private health cover can be life-changing if it means you get seen to sooner.

“See if you can maintain the same level of cover with a different provider and smaller price tag or if you can lock in cheaper premiums by getting rid of cover you don’t need.”

Kochie’s tips for tackling health insurance hikes

Lock in a cheap rate early. You can effectively turn back time on the rate rise by paying your annual premium before changes kick in on 1 April.

Look for special offers. Many insurers roll out perks and incentives to attract new members. These can include waived waiting periods, bonus coverage, or even free months of insurance.

If you don’t use it, lose it. Top-tier policies come with plenty of benefits, but they also come with a hefty price tag. If your health needs have changed, consider whether a lower level of cover provides what you need without unnecessary costs.

Don’t fear the waiting period. If you change insurers, your new provider will honour waiting periods you’ve already served. However, you’ll need to wait for any new or upgraded benefits.

ANNEX

Source: Department of Health and Aged Care. Delayed indicates where the rate rise was delayed and didn’t occur on 1 April. This was mainly due to the impacts of the COVID-19 pandemic.

2026 average rate rise by fund.

 Source: Australian Government Department of Health, Disability and Ageing