Apply to increase private health insurance premiums

Insurers must apply to the Australian Government Minister for Health for approval to increase private health insurance premiums.

Annual premium round

You can apply to increase the premiums of your private health insurance policies once each year.

We call this the annual premium round.

View the average annual premium increases for each insurer and the industry from 1997 onwards.

When to apply

You can apply for premium changes in November each year.

Approved premium increases take effect on April 1 each year.

Our last round (the 2021 premium round) closed on 19 November 2020.

How to apply

Apply using the approved premium increase application form.  We provide this form when a new round opens.

To find out about the information we ask for, view the application form for the 2022 round.

Assessment

We and the Australian Prudential Regulation Authority (APRA) assess all applications to ensure requested increases are justified. We consider:

  • the application’s merits
  • an actuary’s opinion
  • APRA data.

When we have examined an application it is passed to the Minister to consider.

By law, the Minister must approve an application unless the change is not in the public interest.

Outcome

The Minister announces the outcome of premium rounds in December each year.

View the 2021 premium round announcement.

Notify policy holders

You must give policy holders notice of approved premium increases. You must give them enough notice so they can find a different policy if they want to.

The industry-developed Private Health Insurance Code of Conduct provides more detail about how to communicate with policy holders.

Legislation

See Section 66–10 Minister’s approval of premiums in the Private Health Insurance Act 2007.

Average premium price change

The average premium price change for each insurer is calculated according to the following formula.

(FCI with premium changes – FCI without premium changes) x 100 FCI without premium changes

(Where FCI is the forecast contribution income for the insurer for the 12 month period following the implementation of the changes, excluding forecast changes in membership, and including age-based discounts and rate protection.)

A revenue based measure, such as the percentage change in forecast contribution income is considered to be the most appropriate way of reflecting the price change in premiums that will be received by an insurer. This method is less biased by extremely low changes for particular products and/or distortions arising from wide fluctuations in the number of policies covered by a particular product, compared to other methods such as simply averaging out the premium changes for individual products

The industry weighted average premium change calculation formula is outlined in the Private Health Insurance (Incentives) Rules 2012 (No.2). It specifies the industry average premium increase being the average change in premiums for each product subgroup offered by every private health insurer, weighted according to the number of people covered under complying health insurance policies in each product subgroup.

The insurer and industry weighted average include the impact of the savings from rate protection and age-based discounts.

  • If you can pay your health insurance premiums in advance, some insurers will offer a rate protection. With rate protection, if premium rates are increased within the period you have already paid for your insurance, you will not have to pay increased rates until that period ends. If you do not have rate protection, the insurer will ask you to pay the balance owing on the new rates, or reduce the length of time your advance payment covers.
  • From 1 April 2019, insurers are able to offer premium discounts on hospital cover of two per cent for each year that a person is aged under 30 when they first purchase hospital insurance, to a maximum of 10 per cent for 18 to 25 year olds. For a consumer on a $1,500 policy the savings is up to $150 and for a young family on a $3,000 policy the savings is up to $300.
Last updated: 
17 September 2021

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