Millions of Australians warned of jump in health insurance premiums
For the first time in half a decade, the 15 million Australians with private health insurance face a steeper rise in their annual premiums.
On Wednesday, private health insurers will submit their proposed insurance premium changes to Federal Health Minister Mark Butler for review.
New analysis by Money.com.au shows next year's premium increase will break a five-year trend to align closely with health inflation.
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Health Minister Mark Butler has urged private health funds to offer customers value for money over insurance premiums. . Getty
Soaring private hospital costs and wage increases are expected to drive up the cost of premiums.
Money.com.au general manager of health insurance, Chris Whitelaw, said since 2021 and the aftermath of the pandemic, premium increases have been restrained but that is due to end.
"Their pricing buffer is running out, and the private health sector is likely to recalibrate after several years of suppressed pricing.
"We expect 2026 could mark the first year in half a decade where premiums and health inflation move in tandem," he says.
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Soaring private hospital costs and wage increases are expected to drive up the cost of premiums. Getty Images/iStockphoto
Butler said he expects health funds to show good faith in their proposals, but they are facing cost rises and a struggling private hospital sector.
Health insurance premiums increased by an average of 3.73 per cent this year.
The changes were announced in February after Butler twice knocked back insurers' earlier proposals for steeper increases of between 5 per cent and 6 per cent.
In the lead-up to Wednesday's submissions, Butler said he expected private health funds to make "more strenuous efforts" to offer value to customers and help struggling private hospitals.
His final decision - expected between December and late January - will determine how much more Australians will pay for private health cover when new premiums begin next April.
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