What is the health insurance rate rise and why should you care?

Every year on April 1st, health insurance premiums in Australia increase. In 2019, the prices went up by 3.25%. In 2020, prices are increasing again! The exact additional amount you’ll be charged depends on your current fund and policy, but the industry average is 2.92%. If you’d like to check your estimated premium increase for 2020 you can use our health insurance rate rise calculator.

If you have private health cover or are planning to purchase a policy in the near future, it’s worth considering how the premium increase will impact you. Some smart Aussies are using this time to take advantage of this increase to compare funds and often times are able to switch to an equivalent policy at a lower premium.

If you have any concerns, you can compare policies to find out if you’re paying too much. Comparing health insurance annually ensures you’re getting good value, well-suited cover for the best possible price. It’s one way to make up for the health insurance rate rise and could you you hundreds.

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Health insurance rate rise calculator

Health insurance premiums increase on April 1st every year. How much more will you pay? If you haven't compared policies in the past year, you could be paying more than you need to.
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How much will the rate rise cost you?

Your premium is likely to rise by

For instance, you can expect an annual premium of $1,000 to increase to $1,178. That's an average increase of $00.00 for singles, $000.00 for couples and $000.00 for families. Don't want to be stuck paying for more health cover? Save money now.

Check how much you’ll be charged this year after the rate rise. Note that these are estimates only, based on average policy prices in Australia and average annual premium sourced from privatehealth.com.au.

Knowledge is power. Learn more about the 2020 rate rise changes…

Year Average Premium Increase
2013 5.60%
2014 6.20%
2015 6.18%
2016 5.59%
2017 4.84%
2018 3.95%
2019 3.25%
2020 2.92%

Last year, we helped
new customers
purchase or switch policies.

A simple comparison gives you confidence that you’re on the best policy for you, at the right price… And ensuring you’re happy with your health insurance is of utmost importance to us.
Here’s why.

FAQs about the health insurance rate rise…

  • Why do health cover premiums increase every year?

    Premium increases are related to the rising cost of delivering health services in general. This includes inflation in cost for things like medical equipment, doctors’ fees, and wages for hospital staff.

    Health funds increase their premiums to make sure that they can continue to provide member benefits and cover claims. The bulk of premium payments go towards paying out claims. As it costs more to cover claims, funds are forced to increase premiums to maintain their level of service.

    Australia’s aging population means that more people are making claims through private health cover. In combination with the increased cost of hospital admissions, it is costing insurers more to provide the same level of benefits, and some of that cost gets passed on to members.

    Each year, health insurers submit their proposed premium increase—and a justification for the increase—to the government for approval. If they cannot prove that the increase is necessary to cover their costs, then it will not be approved.

  • Can I avoid the health insurance rate rise?

    While you can’t avoid the rate rise entirely, there are ways to reduce its impact. First, see if your health fund offers rate protection when you pay your premiums in advance. This essentially locks your rate until the end of the rate protection period.

    You may also be able to reduce the premiums on your policy by paying a higher excess or co-payment. While this can translate to lower premiums, it could mean higher costs when you have to make a claim.

    The best thing to do when faced with a rate rise is to shop around for a better deal. You may be able to find a better rate on a similar level of cover from a different fund. It’s also a good time to review your level of cover and upgrade or downgrade as needed.

    Compare policies online with Health Insurance Comparison to get a free quote on cover from some of Australia’s leading health insurers. It’s a quick way to see what other options are out there, and it could even save you some money.

  • What’s involved in comparing health insurance policies?

    We’ve made comparing policies as easy as possible, and it can all be done online. You’ll start by entering a few details about yourself, like your life stage and your location (prices vary by state!), so we can get a better understanding of your needs, and the options available to you.

    From there, you’ll choose your cover options, so we can search for policies that are tailored to what you want. Once you have your quote, if you like what you see, you can apply right away and we’ll help you with switching to your new policy and cancelling your old cover.

    That’s it! Comparing policies is quick and easy. If you’ve got any questions about your quote, our friendly team is just a phone call away. Once you’ve picked out a policy, you can apply securely online or give us a call, and we can sort it all out for you.

  • How much will health insurance premiums increase this year?

    The 2020 industry average premium increase is 2.92%. This is the lowest average increase in 19 years, although comes after a year of government reforms and confusion.

    Increases for individual funds and products within those funds may be above or below 2.92%. The highest fund average for 2020 is 5.63%, while the lowest is 1.98%. Your insurer must inform you in writing of the premium increase for your policy.

    Last year (2019) marked the introduction of a new youth discount, designed to provide an incentive for young people to join a health fund. Insurers are now allowed to offer discounts of up to 10% on policies for members aged 18 through 29, although this is not mandatory so ensure to check with us if your insurer will be granting this discount.

  • What’s 2.92% in the grand scheme of things, anyway?

    Many health fund members end up absorbing the cost of the premium increase rather than comparing their options to save money. After all, 2.92% isn’t that big of a number, right?

    This rate rise is expected to cost the average single Australian an extra $0.68 per week. For families, it’s an extra $1.99 per week. Multiply that by 52 weeks and singles are paying an extra $35.56 while families shell out an additional $103.48.

    To understand the real impact of the rate rise, we have to look at the bigger picture. It might seem like a few extra dollars over the course of a year, but remember that this is happening every year.

    For example, a family policy that cost $2500 a year in 2015 would cost $2970 by 2019 and $3056 in 2020, according to industry average rate rises. So your policy might be costing you an extra $86 this year, but over time those numbers add up.

  • Where can I find more information about the rate rise?

    Looking for information? You’re in the right place. We’ve put together a number of resources here on this page with everything you need to know about the annual rate rise, along with tips on how to find cheaper health cover without sacrificing quality.

    For more details on the rate rise, you can also visit the following:
    Commonwealth Ombudsman
    Department of Health

    Health Insurance Comparison is your resource for all things health insurance, from understanding member networks to everything you need to know about hospital cover.

    For more information on how you can save on health cover, visit the Health Insurance Comparison homepage or give one of our Sydney-based insurance experts a call at 1300 163 402. You can also drop us an email at info@healthinsurancecomparison.com.au.

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    Government reforms

    The new government health insurance reforms in 2019 which were aimed at helping reduce confusion, however IPSOS is reporting confusion. These reforms saw changes around:

    • The way health insurance policies are categorised
    • The removal of certain natural therapies
    • Women’s health services
    • Mental health services
    • The role of the health insurance ombudsman
    • Youth discounts for Aussies under 30
    • Assistance for rural Aussies travelling to hospital
    Learn more

    Therapies no longer covered after April 1st, 2019

    If any of these therapies are important to you, compare policies now and our friendly advisers will be in touch to help.

    Alexander technique, Aromatherapy, Bowen therapy, Buteyko, Feldenkrais, Herbalism, Homoeopathy, Iriology, Kinesiology, Naturopathy, Pilates, Reflexology, Rolfing Shiatsu, Tai chi, Yoga
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