It’s that time of year again when we get a inkling of what’s coming …
Millions of Australians with health insurance will likely pay even more for cover from April 2026, as the federal government is already in the process of reviewing proposed price changes from health insurers for the New Year.
It comes as the 12.5 million Australians with hospital cover and 15.2 million with extras cover saw premiums rise by an industry average 3.73 per cent last April.
Health insurance price changes take effect every year and catch many off guard. As consumers, we usually see the letter in the mail or a message in our email inbox from our insurer telling us that they’re hiking prices. It may feel like a bit of a cash grab, but there’s actually a strict process that health funds go through to get those price changes over the line.
Insurers can apply to increase their rates only once a year, between September and 12 November. This year, health funds have once again been submitting proposed premium adjustments to the Minister for Health and Aged Care for consideration.
Within reason
These applications aren’t a sure thing, though. As we’ve seen in the past, the health minister has rejected proposals deemed unreasonable. Importantly, each application is assessed on its individual merits and approved only if the Minister believes the increase is justified.
While we should have further clarity around 2026 increases by 31 January, this date can blow out if insurers are told to go back to the drawing board with their pricing proposals.
Aussies deserve answers sooner rather than later so they can make some informed decisions, without having to scramble at the last minute.
While insurers use terms like ‘premium changes’ or ‘pricing adjustments’, it is safe to assume that prices would be increased in most cases.
Why another price hike?
The Health Minister has admitted that the private hospital sector is facing ‘a number of temporary and systemic challenges’, citing shrinking profit margins and growing costs which are compounded by a lack of investment in the sector.
We also know that doctor fees are going up, medical equipment and procedures are costing more and in turn, it’s costing insurers more to pay out claims. Those added costs are usually passed on to consumers.
While it’s too soon to know how much the industry average increase will be, Aussies should keep a close eye on correspondence from their health insurer for any pricing changes.
But, not all premiums rise by the same amount. Let’s take the 2025 industry average as an example. The headline figure was 3.73 per cent but the actual amount varied significantly between funds.
One fund increased premiums by an average of 9.56 per cent, but another was as low as 1.91 per cent. So, the big industry average we all wait for is a bit bogus if you ask me.
What you can do
Look for the premium adjustment in your bill and if the hike is too high, be prepared to switch.
Courtesy of Compare the Market, here are some tips when it comes to saving money on health insurance.
- Shop around – even if you think you’re on a good deal, if you’re hit with a premium hike, compare your options and never accept the increase without doing your research first. You may be able to track down a similar level of cover for less.
- Look out for perks and promotions – Insurers want your business and will try to lure people over with a range of perks, including waived waiting periods on extras, free coverage for a few weeks, access to reward programs and more. These deals can add real value, so use them to your advantage. The kicker is that they’re often reserved for new customers only which can lend well to switching.
- If you don’t use it, lose it – Rather than ditching cover completely if your premiums increase, cherry-pick what you do use or need and get rid of everything else. A lower-level policy might still cover your essentials without the extra cost
- Similar names don’t always mean a similar product – Just because two policies have similar names, it doesn’t mean they’ll always offer the same benefits. Pay close attention to any inclusions, exclusions, waiting periods, benefit limits and excess amounts. It’s all in the policy brochure or available by calling your health fund directly.
