Private Health Insurance Premiums Increase by 3 Percent

Australians facing sharp increases in household expenses will soon experience a 3 percent rise in private health insurance premiums—the largest increase in five years due to federal government adjustments.

With about 14.7 million Australians holding private health insurance coverage, the 3.03 percent increase surpasses the 2.9 percent from 2023 and the 2.7 percent from 2022.

Federal Health Minister Mark Butler praised the rise, highlighting that Australians are receiving “value for money” from their private health insurance, which is increasing at a slower rate compared to wages, the age pension, and inflation.

The increases in health premiums are significantly lower compared to other insurance products like home, contents, and income protection, which saw an average increase of nearly 17 percent in 2023.

While wages increased by 4.2 percent and inflation remained steady at 4.1 percent in 2023, health premiums rose by 3.03 percent.

In a statement from the Department of Health and Aged Care, Minister Butler mentioned his collaborative efforts with the insurance sector to mitigate the rises and reduce the financial strain on the public, who are still grappling with the cost of living crisis, high inflation, and COVID aftermath.

“I refused to simply accept the claims of health insurers as requested by the opposition. Instead, I urged insurers to reassess their proposals and present a more reasonable offer for the 15 million Australians with private health insurance.”

Australian Unity Health showed the lowest increase among major providers at 1.42 percent, followed by AIA at 2.19 percent, while CBHS Corporate Health Pty Ltd recorded the highest increase at 5.82 percent.

Minister Butler mentioned that upcoming tax cuts will alleviate the burden on middle-income earners, providing a 2.5 percent relief to offset the premium increases.

“While we understand that any increase will be challenging during a global cost-of-living crisis, the Albanese government has ensured that health insurance premiums will be more affordable relative to Australians’ wages. Additionally, Labor’s tax cuts will benefit all Australian taxpayers starting from 1 July, allowing Australians to earn more and retain more of their earnings,” he explained.

“Private health insurers must ensure that their members are receiving value for money. When costs rise, Australians expect higher premiums to contribute to system-wide advancements, such as increased wages for healthcare professionals and ensuring the availability of affordable services,” Mr. Butler emphasized.

The government has already allocated a $7.3 billion rebate to private health policyholders.