Australian households face another cost-of-living challenge in 2024 as health insurance will increase by an average of 3.03 percent on 1 April, adding an average extra $121 to people’s premiums. 

However, financial marketplace and advice company Compare Club has crunched the numbers and with five funds holding nearly 80% of the market, the average increase for the majority of health insurance members is likely to be closer to 3.57 percent. According to Compare Club’s analysis of over 180,000 policies, could add as much as $208 to some couples as families policies.

Using the “Big Five” average, single policyholders can expect to pay an extra $96 per year on average, while families are looking at an average increase of around $181  per year and couples an average of $201.

This is the highest raise since 2019 when premiums rose by an average of 3.25%

CBHS Corporate has the biggest rise at 5.82 percent adding an extra $232 on average to policies, although this could rise to up to an average of $340 for some couples and families.

The Federal Government rejected the health insurance industry’s plea for a 6 percent increase last December citing the cost of living pressures for Australians, but the rises are over the 2.9 percent premium increase in 2023, and the 2.72 percent increase in both 2021 and 2022.

Premium rises have been out of sync for the last few years due to COVID-19. To catch up, several insurers put their rates up in the second half of 2023 meaning many Australians are now being slapped with a second increase in 6 months.

Compare Club’s Head of Research, Kate Browne, advises the best way to fight back is to review what you have now and compare it to what else is out there. 

“Being hit with the biggest increase since 2017 is adding more pressure to household budgets, after massive hikes in car and home insurance premiums.  But the good news is there is a lot of competition for your business and there are several good deals on offer right now including up to 12 weeks free. Swapping health insurers can take less than half an hour and can save you hundreds of dollars and get you more bang for your buck in terms of value.

Advice from Compare Club:

1. Regularly Review Your Health Insurance Coverage

According to research from IPSOS, one in five Australians has not reviewed their health insurance in over five years which means they are missing out on better deals and value. Older policies might need to catch up with inflation.  

Kate Browne says newer customers can land much better value cover, “Old policies tend to be grandfathered, meaning two people can have similar policies with the same insurer but one is getting better value than the other. Loyalty is not always rewarded”.

2. Basic policies are junk. Beware of downgrading health cover

While downgrading coverage may seem like a cost-saving measure, it's crucial to explore all options before making changes. 

Basic-level hospital cover is just that - basic. It will help you avoid taxes and ambulance costs but very little of use beyond that.. Anybody who suggests you drop your level of cover down to Basic is essentially suggesting you move to a junk policy."

“Last year Aussies wasted $26.4m on these policies and this highlights why focussing on the price is a false economy. The difference between a cheap junk policy and a more comprehensive level of hospital cover is between $12 - $20 a month,” said Kate Browne. 

"Private health insurance can be very confusing and costly, but for many Australians, it's the best way to avoid long public waiting lists, and have more choice of healthcare options and specialists. However, it's very easy to take out the wrong kind of cover that will cost you money but deliver very little in terms of value."

3. Don’t buy health insurance off the shelf

Health insurance is a very complex product and for most Australians, it’s easy to end up with an insurance product that doesn’t provide the right kind of cover that will give you good value.

There are so many funds and policies that the first step is to talk to an expert who is across all of them. It is possible to save money by switching to another fund or maintaining the same level of coverage while making savings. 

Recent research from Compare Club has found over 70% of health insurance holders who shop online take out a different, more suitable policy after speaking to a health insurance expert.

"Reviewing and swapping health insurers is easy and quick to do. There are no waiting periods to serve if you swap like for like cover and the entire transfer can take less than 30 minutes with no paperwork."

4. Keep adult children on family health cover until the age of 31 to offset the Medicare Levy Surcharge

2024’s HILDA survey revealed a trend of adult children residing at home for longer. 54% of men aged 18-29 and 47% of women in the same age bracket, continue to live with their parents.

For families navigating healthcare options, it's essential to consider the advantages of keeping adult children on the family health insurance policy. Under current regulations, dependents can remain on their parent's health coverage until the age of 31 which can lead to huge savings compared to acquiring separate policies, in some cases as high as $7000 a year depending on how many children you have

Families with one child in their late 20s who holds a low level of hospital cover and extras could save up to $1,010 according to Compare Club's pricing data, even with the 25% loading fee that insurers will charge.

There are even bigger savings to be made for families who have two or more children in their late 20s. With no additional charge for additional children, the savings start to add up.

• 2 children = up to $3,812/year saved

• 3 children = up to $5,604/year saved

• 4 children = up to $7,396/year saved

For media enquiries:

Justin Kelly | Jasmine Kostas Media + Capital Partners press@compareclub.com.au

About Compare Club

Compare Club is one of Australia’s fastest-growing personal finance marketplaces, it helps Australians save money by navigating complicated and important financial decisions. Compare Club’s panel of experts offer bespoke advice to over 3.6 Million members making 1 Million product enquiries per year on key financial decisions, including health insurance, electricity & gas bills, personal, car and home loans. Compare Club is locally owned and employs 500 passionate staff across Sydney, Melbourne, Brisbane and another 50 staff in Indonesia and the Philippines.