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

Insurers can apply to increase the premiums of their private health insurance policies once each year.

We call this the annual premium round.

View the average annual price changes for each insurer and the industry from 1997 onwards.

When to apply

Applications are due 3pm AEST, Wednesday, 15 November 2023.

Approved premium price changes take effect on April 1 each year.

Our last round (the 2023 premium round) closed on 15 November 2022.

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 2024 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 typically announces the outcome of premium rounds in December each year.

Notify policy holders

Insurers must give policy holders notice of approved premium price changes. This notice should be provided with sufficient time for policy holders to review their current cover and consider a different product, if they choose 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.

(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 and 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 can offer persons aged 18-29 years discounts of up to 10 per cent of their private health insurance hospital premiums. More information can be found at www.privatehealth.gov.au by searching ‘age-based discounts’.
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