Will Health Insurance Premiums Go Up in 2027?
Published October 5, 2026
If you have noticed the increases in premiums on health insurance policies, then there is a good reason for that. Currently, about 40% of Australians have hospital covers, while 60% have extras plans. These numbers are only expected to grow.
Millions of Australians have either hospital cover, or extras, or both kinds of coverage. Even the slightest increase in premium rates could result in an extra billion dollars further down the road. Now, the question is, will premiums increase in 2027, and what can be expected in terms of premiums? In other words, what can be done about it?
Well, chances are quite high that premiums will increase once again in 2027, however, the rate of this increase and the impacts it will have for you will depend greatly on your action plan now.
Why are premiums going up?
| Health Insurance Indicator | Latest Figure | What It Shows |
|---|---|---|
| Australians with hospital cover | ~40% | A significant share of Australians hold hospital insurance |
| Australians with extras cover | ~60% | Extras cover is widely held across Australia |
| Hospital benefit payments growth in 2024 | 8% | Benefits grew faster than general health inflation |
| Health inflation rate | 4% | Healthcare costs increased significantly |
| Average out-of-pocket gap per hospital stay | $426.80 | Members can still face substantial costs |
| No-gap in-hospital services, 2023–24 | 87.7% | Most in-hospital services were provided without a gap |
There are plenty of reasons why premiums are going up and these reasons are not limited to the fact that the insurance funds simply feel like increasing them.
1. Increased claims and utilization
Health insurance companies have increased the amount of benefits payments. Hospital benefit payments made by health funds in 2024 grew by 8%, which is much higher than health inflation rate, being 4%.
When benefits accruing to each individual become growing faster than costs of providing them, the time comes when the premium should cover this difference.
2. Prevention
People are living longer, but the population suffers from more chronic illnesses. Now we can observe:
- More joint replacements, heart operations and complicated surgeries.
- Increased utilization of advanced imaging, devices and biologics.
- Extended episode of care and rehabilitation.
Costs per procedure are estimated in tens of thousands of dollars per person and, consequently, the total amount of benefits payments increases.
3. Out-of-pocket payments increase
Despite having an insurance coverage, some individuals face even higher out-of-pocket payments. APRA statistics show that out-of-pocket cost gap per hospital stay was $426.80 at the beginning of 2024.
The AMA also indicates that 87.7% of in-hospital services were provided on a ‘no gap’ basis in 2023-24, compared with 89.3% several years ago. While this is not a premium determinant factor, it is obvious that there is a definite and visible increase in the pressure applied to the overall expenditure in the healthcare industry.
4. Margins in the industry and regulations
As APRA says, the health funds showed a striking 16% margin and management costs from the health premiums in 2024-25, while paying the rest 84%.
It expects that the scheme will be financially robust enough to cover the future expenses, but at the same time, it investigates the reasonableness of the projected increases. It is the contradiction that appears every year with the review of the premium increases.
Getting best value health insurance in 2027- Handpicked Tips
- Consider the little: The big funds aren’t always the best value. Not-for-profit funds are able to pay back more of the premium in benefits to members, in some instances the small funds also perform well in areas such as hospital insurance value.
- Compare Inclusions: When searching for health insurance, you and your family will have the ability to compare the hospital categories covered, reduced, or excludable, and the extras benefits packages and the generosity of the extras benefits package based on the health services you use. We will show you the comparative result of the no gap and the known gaps of the health insurance scheme. Indeed, this is far better than searching the website of each health community one after the other.
- Check excess and co-payments: Your excess payments may be an easy change to make to lower your premiums, perhaps if you do not think you will make claims in the immediate future. But ensure that you could still afford to pay the excess in the event of an unforeseen incident and that tax benefits are not being affected.
- Review your cover at major life changes: Increases in premium are good reminders to check whether your policy still fits your life stage. If you are a young single, do you need pregnancy cover yet? If you have a family, are orthodontics and extras limits still appropriate? Or, if you are empty-nesters, are you still paying for child-centric extras you no longer use? A standard review every year or two, especially before April when increases land, can keep you ahead of the curve rather than reacting after the fact.
To conclude
On the basis of everything that is known at this time concerning government process, recent escalations, independent analysis, and more, it is likely that a cost-of-premiums increase will occur once again in 2027. The actual cost of health insurance 2027 will depend on the specific fund or policy being referred to; however, it is unrealistic to assume everything will remain the same. Utility Market can assist you with your present health care plan to discuss your options available to change to a plan more suitable to your needs.
