Private Health Insurance Increases 2024

In 2024, the federal government announced health premiums would rise by an average of 3.03% on 1 April. This is the largest premium price hike in the past five years.

Even so, some health funds are increasing their premiums by significantly higher than the government’s stated average. One insurer has opted for an average premium increase of 5.82% - which is well above the average.

If that all sounds a bit confusing, don’t worry. Below we’ll take you through how the 2024 premium increase may affect you, the difference in premium increases by fund, and how you can make sure you’re not overpaying for cover.

How much is the 2024 average health insurance premium increase?

The average premium increase is 3.03%. The federal government estimates this means that the average policyholder could see a monthly increase of $11.18 if you’re on a family or couples policy, or $6.07 for singles policy holders*.

That said, Compare Club's experts have run the numbers against the average cost of premiums we've sold over the past five years, and we estimate the average annual increases will be:

• Singles: $73

• Couples: $144

• Families: $153

• Single parent families: $112

Of course some policies may go up by more and some may go up by less.

The bottom line? Check any messages from your fund. They may not always be easy to understand, but they will help you work out if you’re paying too much.

When will my health insurance premiums increase in 2024?

Health funds will increase their premiums from 1 April. The following funds put up their premiums on this date last year:

• ACA

• AIA

• CBHS Corp

• HHI (CDH)

• Doctors Health

• HBF (includes CUA)

• HIF

• Health Partners

• LaTrobe

• Mildura

• OneMediFund

• Peoplecare

• Phoenix Health

• Queensland Country Health

• TUH

• RBHS

• Westfund

List of historical premium price changes by insurer – 2024

Last year, several funds deferred their increase until later in the year. At the time of writing, there's been no announcements from any funds about delaying their premiums increases in 2024.

We still expect the premiums to rise from 1 April for all funds, but if this changes we will update this information for you here.

So what does it mean if a fund has delayed their price increase?

• Members will get a few extra months of lower premiums but the cost of their policy will go up at some point in 2024.

• A delayed price rise this year could mean two premium increases in quick succession if the funds revert back to the standard 1 April date in 2025. We've already seen this happen last year when insurers put prices up on 1 October 2023, and now their policyholders looking at another increase in April less than six months later.

• Be smart: Thinking of switching? You may get a better deal by moving funds before your insurer puts their prices up. Our experts can help advise you on where to find a good deal.

How much extra will a health insurance policy cost me in 2024?

If you normally pay $100 a month for private health insurance, a 3.03% rate rise would see your monthly premium increase to $103.03. That might not sound like much, but when you add up the costs over the course of a year, it can make a huge difference to how much of your income you're spending on health insurance.

Our internal data shows that if you haven’t switched health funds in the last five years, you could be paying a whole lot more than you need to, based on average premium increases. Not only that, but some funds are increasing their average premiums by well above the government average of 3.03% – one of the highest increases is CBHS Corporate, who are putting premiums up by an average of 5.82%.

That's why it's important to check your policy costs if your health fund tells you that your premiums are going up. You could actually be at the top end of their rate rise. You can use our private health insurance rate rise calculator to check your fund’s expected average premium increase for 2024.

Will my health fund tell me about the premium increase?

Yes. Your health fund should let you know about your premium increasing by letter, email, app messaging, or SMS. This will happen very soon, given the 1 April increase deadline so keep an eye out for any communication.

Even if your fund delay your premium increase to later in the year, they still need to notify you that it’s happening.

Why do health insurance premiums increase each year?

The most common reasons why private health insurance funds increase their premiums annually include:

• More people are accessing our health services each year.

• An ageing population and higher rates of conditions like cancer or heart attacks places a bigger strain on our health services.

• Improved treatments are often more expensive for our healthcare system.

These factors help explain why health funds increase their premiums – and the cost of providing insurance to us gets more expensive each year.

Can I claim back my health insurance premiums on my tax return?

Sort of. If you have private health insurance, you may be eligible for a rebate on premiums.

If you haven't claimed the private health insurance rebate through reduced premiums throughout the year, you may be able to claim it as a tax offset.

This means that your health insurance rebate is calculated as a percent of the cost of your premium, and you can claim it as a tax offset by reducing the amount of tax payable on your income.

Your private health insurance rebate amount is calculated based on your age and household income.

Can I avoid the impact of health insurance premium increase in 2024?

If you switch to a different, lower cost fund than your current health fund, yes you can. Premiums will still increase by the average of 3.03%, but a lower cost policy can still save you money. 

Our experts at Compare Club look at a panel of health policies side by side to provide you with options that fit within your budget and support your lifestyle, saving you time and money.

What is a lock-in premium?

When health insurers increase their premiums, they first give you the opportunity to pay for your next 12 months' cover upfront at your current rate.

This means that you won't have to pay the increased premium rate for up to a year and is known as a lock-in premium.

How do I lock in a premium?

In order to lock in a premium, you simply need to pay the full 12 months before your insurer's price increase comes into effect. 

If your premium increases, your health insurer must notify you before increasing it.

When is the best time to lock in my premium?

The rate rise usually starts on April 1st each year, so you'll need to ensure that your bank has processed the payment for your cover before then.  Some banks can take up to six days to process a payment, and some insurers even have a cut-off date for accepting premium lock-ins, so you’ll need to do it sooner rather than later.

Ideally, locking in your premium in early to mid-March ensures there’s plenty of time for your payment to go through.

What are the benefits of locking in my premium?

The most significant benefit of locking in your premium is that you save money. 

Let's say you're currently paying $50 per month for insurance, and your insurer ups their monthly premium to $56.

If you lock in your premium at your current rate, you will pay $600 for the whole year, whereas if you left it and paid the increased premium, you'd pay $672, meaning a significant annual saving.

The other benefit is that by paying everything upfront, you're left with one less bill to worry about for the rest of the year.

Will I have to serve new waiting periods if I switch policies?

Not necessarily. You can switch to an equivalent or lower level of cover without serving new waiting periods on your health insurance. You’ll only need to serve new waiting periods if you've upgraded to a higher level of cover.

Also, remember that any unserved waiting periods will transfer to your new health fund. So if you end up switching health insurance to an equivalent cover, you may need to finish these unserved waiting periods before you can make a claim.

How do I know if I’m getting value for money from my health fund?

If you haven't changed funds or policies in a few years, there's a good chance you could be getting better value for your money elsewhere.

And if you’ve moved to a different state or out to regional Australia, your current health fund may not have agreements with your local hospital or dentist.

One of the fastest and easiest ways to see how your current premiums stack up – and how much you could save by switching – is to compare health insurance quotes.

Is it worth buying or switching health insurance if premiums go up every year?

While Medicare is an essential service for Australians, it does have limitations. 

Buying private health insurance provides a level of financial protection against health care costs – and it covers you for things Medicare typically won’t like dental, optical and physio to name a few. 

Appropriate private health insurance can also help you skip the long public hospital waiting times if you need treatment.  

In addition, if your income is above the Medicare Levy Surcharge threshold of $93k (or $186k as a couple), you can avoid paying this tax by buying eligible hospital cover***.

Reviewing your private health cover every year or so ensures you’re not overpaying. It can save you hundreds or even thousands of dollars in the long run.

Over the last 5 years, Compare Club’s experts saved customers an average of $300** when they switched policies through us.

That could be enough to cancel out the extra cost of your annual health insurance premium increase.

How are premiums calculated for health insurance?

Health insurers set their premiums for the various levels of cover they offer.  As a general rule, the higher the level of protection a cover offers, the higher the premium..

After that, the actual amount you pay is dependent on multiple factors, including whether or not you have a Lifetime Health Cover loading, the private health insurer and, of course, the type of health insurance policy you decide to take out.

With that in mind, it's always worth taking the time to carefully compare offers from private health insurers to find one that offers the coverage you and your family need at a price you can afford. You can also contact the Private Health Insurance Ombudsman for general information about private health insurance policies.

Sources

^Department of Health, List of historical premium price changes by insurer for 2024.

^^Commonwealth Ombudsman, Private Health Insurance - Quarterly Update to September 2023.

*Department of Health & Aged Care announcement 2024

** Based on 336,746 customers between 1 Jan 2019 - 23 December 2023.

*** You can avoid paying the Medicare Levy Surcharge only for the period you hold eligible health cover.

Chris Stanley is the sales & operations manager of health insurance at Compare Club. With extensive experience and expertise, Chris is a trusted leader known for his deep understanding of health insurance markets, policies, and coverage options. As the sales & operations manager of health insurance, Chris leads a team of dedicated professionals committed to helping individuals and families make informed decisions about their health insurance needs.

Meet our health insurance expert, Chris Stanley

Chris's top health insurance tips

• 1

  Australia’s public health system is world-class, but wait times for public hospitals can be long, inconvenient - and leave you living in constant pain while you wait.

• 2

  An appropriate private health insurance policy can speed up your surgery, relieving your pain sooner.

• 3

  Family health cover means your children are covered under the same policy as you.

• 4

  Many health insurance policies come with a 12-month waiting period for pregnancy-related cover, so it’s a good idea to get a family policy organized well before starting your family. This means your child will be covered from birth until at least their early twenties (depending on which health fund you select).