2018 Private Health Insurance Premium Changes

Page last updated: 02 March 2018

The Australian Government understands the pressure that private health insurance premium increases put on Australians.

In recognition that private health is a key part of Australia’s health system, the Government recently announced a package of reforms to make private health insurance simpler and more affordable. These reforms aim to improve value and make policies easier to understand.

A key component of the reforms includes reducing benefits for a range of prostheses by about $1.1 billion over four years; this has resulted in lower premium increases. The reforms also include changes to make it easier for policy holders to access mental health services when they need it. Patients with limited mental health cover will be able to upgrade their cover on a once-off basis to access in-hospital mental health services without serving a waiting period.

Further, the introduction of aged-based discounts will improve the affordability of private health insurance for young Australians by making their premiums for hospital cover up to 10 per cent cheaper.

This year’s increase in premiums is the lowest in nearly two decades. From 1 April 2018, the (national industry weighted) average private health insurance premium increase is 3.95 per cent.

All private health insurance premium change applications are considered by the Minister for Health after careful examination of each application by the Department of Health and the private health insurance prudential regulator, the Australian Prudential Regulation Authority. Each application is closely scrutinised to ensure the increases are fully justified and is assessed on its own merits.

There are 37 private health insurers currently operating in Australia and consumers are encouraged to shop around to get the best value product for themselves and their families. Independent, commission free advice on private health insurance is available on the PrivateHealth.gov.au website. In addition, consumers are able to view detailed pricing of all the private health insurance policies available in Australia.

There are a number of issues that impact upon private health insurance costs, and these include:

  • higher costs of treatment and services;
  • increasing utilisation of privately insured services;
  • an ageing membership; and
  • an increase in the chronic and complex conditions of members.
The decision to purchase private health insurance is a personal choice. People who cannot afford private health insurance, or do not wish to take it out for other reasons, continue to have access the public hospital system through Medicare.

Page reviewed: 11 May 2018