Why do private health insurance premiums rise at the start of each financial year?
Published May 6, 2026
Private health insurers in Australia are required by law to raise premiums no more than once a year, as stated by the Department of Health, Disability and Ageing. Every year, these insurers need to apply for permission from the Federal Government to increase their premiums, typically before mid-November. After being granted permission, such increases can become effective from 1 April.
How do health insurance prices rise?
The submission by the insurers to the Federal Government will include information on how much they propose to raise their premiums and why. As mentioned by the Commonwealth Ombudsman, the proposed price increase will then be assessed by the Department of Health and the Australian Prudential Regulation Authority (APRA). Both the government and APRA will collaborate with insurers when reviewing and potentially adjusting their requests for a premium increase in light of the cost of healthcare provision and the needs of Australians. As opined by the Health Minister, “Insurers need to ensure their members are getting value for money and that premiums are contributing to improving the system, including nurse pay rises and sustainable hospitals.
How high is the health insurance premium increase?
The health insurance companies can increase their premiums at varying rates each year. According to the Federal Government, the increase rate averages 4.41% from 1st April 2026, which is the highest increase percentage since 2017. However, some health insurance companies may increase their premiums beyond the national average, while others may raise their premiums below the national average. Besides, insurers may not equally increase their premiums across all their policies.
How to Avoid the Health Insurance Premium Increase
In case your health insurance company has increased its premiums or intends to do so in the future, you have various avenues to consider to help control your budget:
Negotiate a discount: Talk to your insurer to ask whether it can reduce the cost of your health insurance. Your insurer may agree to lower its price to retain your custom.
Reduce your cover: You may need to reduce some cover aspects to save money but still have sufficient cover for basic needs.
Reduce additional options: Since there are some optional extras included in your policy, which you may not be utilizing anytime soon, reducing these can help you save money.
Change the Hospital Excess: Making the choice to bear a higher excess amount when claiming for any services provided within the hospital can enable you to reduce the monthly premium.
Make an Early Payment: Advance payment of the annual cost of health insurance for up to a period of 12 months can make premium increase delays possible.
Explore other options: There is a possibility that by opting for the health insurance provided by another organization, you can benefit from lower premiums and discounts for joining.
When considering modifications to your plan, it is important to take into account not only your financial situation, but your health and lifestyle as well. For instance, the same person at a younger age would probably need an entirely different health insurance plan compared to a family or someone living off a fixed pension. Your optimal insurance cover may not necessarily be the one that offers lower premiums; hence, it is always advisable to solicit multiple quotes. Get yourself a personalized health insurance quote today when you click ‘compare health insurance.
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