Re-evaluating Health Insurance: Is It Still Worth It?
Published October 27, 2025
It’s 2025 and too many Australians are feeling the bite from acute cost of living squeezes. Fuelling these cost-of-living pressures, in large part, are high interest rates, runaway inflation and spiralling energy prices, and they’re now beginning to have a tangible impact and private health insurance is coming under scrutiny as an expensive item that may not be immediately justifiable.
As the costs continue to climb, many Australians especially younger people are questioning whether the value of their health insurance policy truly justifies its expense. But before making the big, you’ll want to weigh up the long-term benefits against the immediate cost savings.
Why Australians are re-evaluating health insurance
The past few years have witnessed a steep increase in private health insurance premiums well ahead of wage growth and overall inflation. Although health insurance remains extremely vital to older Australians and those who require continuing medical attention, younger, healthier populations are re-evaluating health insurance and its value.
Their most frequent reasons for rethinking health insurance are:
1. Increasing premiums
Private health insurance premium costs have consistently risen year by year and reached higher than the consumer price index (CPI). To many families, premiums on health insurance have turned out to be one of their largest monthly bills, which only makes it harder at a time when inflation rates and interest rates are already tightening budgets.
2. Immediate value is absent
Depending on your situation, the initial advantage of health insurance can be a small one. Healthy people who only if ever access health services wonder what the rationale is for paying considerable monthly premiums, when there are public health services available nearby.
3. Financial pressures and a cost-of-living crisis
As the cost-of-living rockets upwards, most families are re-examining their budgets with a very close eye and prioritising the essentials (e.g. mortgage payments, food bills, fuel costs). Health insurance, viewed by some as a ‘nice-to-have’ over a ‘must-have’, is therefore the first cost to be questioned.
Paying The Way – Getting the Real Value from Your Policy
Following are some tips you can use to ensure you’re getting real value from your policy:
1. Be aware of your yearly limits and rebates
A yearly limit indicates how much your policy will cover you for each year for specific services such as dental, physio and optical. The rebate, on the other hand, is the actual money your health fund pays once you lodge a claim.
2. Look clearly at what’s covered and not covered
Apart from the cost of hospital stays, the hospital cover value also encompasses what is covered and not covered under your policy. Australians too frequently find they are paying premiums for expensive procedures they will probably never require, like pregnancy services post-childbearing years.
3. Understand gap cover
It’s a gripe familiar to many covered Australians: when you’re slugged with unexpected out-of-pockets after a hospital operation. Gap cover fills the gap between what your health fund covers and what your medical practitioner charges.
Do this ‘before’ you ditch your health insurance
The current financial restraint has naturally prompted many Australians to question the value of private health cover. But cutting off your cover entirely can be more detrimental than beneficial especially if any unforeseen health complications arise.
Rather than cancelling completely, investigate restructuring or comparing other policies first. We find that individuals usually discover they can remain covered for much less expensive premiums simply by changing to a more suitable policy or insurer.
At Utility Market, we have extensive experience in assisting ordinary Australians like you to get through this sometimes-baffling process. We collaborate with you to clearly know your present situation, then we only present to you policies that will provide true value, in accordance with your health requirements and expenditure.
To Summarize
Cancelling your health insurance is a huge decision with lasting impacts. With increasing economic pressures, it’s understandable why many Australians might be seriously considering this option. But first, just make sure you’ve explored all avenues and compare other health insurance policies that are currently on the market.
