Private Health Insurance Increases 2023
Most health funds in Australia raise their premiums every year. While this helps the funds offset any rising healthcare costs, it can also add hundreds onto the cost of health insurance for many policyholders.
In 2023, the federal government announced health premiums would rise by an average of 2.90% on 1 April.
However, some health funds are increasing their premiums by significantly higher than the government’s stated average, while a handful of funds have opted to delay the price rise until later in the year.
If that all sounds a bit confusing, don’t worry. Below we’ll take you through how the 2023 premium increase may affect you, the difference in premium increases by fund, and how you can make sure you’re not overpaying for cover.
Key Points
On 1 April 2023, health insurance premiums increased by an average of 2.90%.
The federal government estimates this will be an average monthly increase of $11.18 for families and $5.07 for singles policies.
Compare Club’s data suggests that the true cost premium increase could be higher for many members.
Some health funds delayed this rise until later on in 2023.
How much is the 2023 average health insurance premium increase?
The average premium increase will be 2.90%. 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 $5.07 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: $68
Couples: $138
Families: $141
Single parent families: $106
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 2023?
Health funds usually increase their premiums on 1 April. The following funds put up their premiums on this date:
ACA
AIA
CBHS Corp
HHI (CDH)
HBF (includes CUA)
HIF
Health Partners
LaTrobe
Mildura
Peoplecare
Queensland Country Health
TUH
Westfund
This year, some other have funds decided to delay their premium increases until at least June, with others waiting even longer. At the time of writing Medibank and ahm put their premiums up on 1 June 2023 and StLukes on 1 July.
The idea is to offer a little financial relief to customers currently hit by rising living costs and ever-increasing interest rates. Inflation has impacted Australian households more than predicted, and some funds are quick to recognise this and offer relief where they can.
At the time of writing, the following funds have announced they’ll defer their increase until later in 2023:
HCF: 1 September 2023
GMHBA / Frank: 30 September 2023
Nib: 1 October 2023
BUPA: 1 October 2023
CBHS: 1 October 2023
Defence Health: 1 October 2023
Teacher's Health: 1 October 2023
Navy Health: 1 November 2023
Australian Unity, 1 November 2023
One fund, Police Health, has opted not to increase rates at all this year. Smaller fund HCI has reduced their premiums by an average of 0.09%.
Funds in bold are on Compare Club’s panel. Funds in italics have restrictions on who can join. We’ll update this section if any other health funds announce they’re pushing back increases.
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 2023.
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 2024. We already saw this happen last year when insurers put prices up on 1 October 2022 and again 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 2023?
If you normally pay $100 a month for private health insurance, a 2.90% rate rise would see your monthly premium increase to $102.90.
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 2.90% – one of the highest increases is HBF, who are putting premiums up by an average of 4.49%.
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 2023.
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 or SMS. This usually happens in February or March, for an April increase so keep an eye out for any communication.
If your fund has delayed the premium increase to later in the year, they still will 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.
They don't always pass on the additional costs to us, their customers, but this is generally why you can expect your premiums to go up.
Rate rises aren't ideal but in theory they should allow health funds to continue to be competitive in what they offer their customers, such as additional services and benefits. This doesn’t always translate into value for money for individual customers though, so it's important to match your health needs with your best-fit health cover.
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 rebate through reduced premiums throughout the year, you may be able to claim it as a tax offset.
In these cases the rebate is calculated as a percentage of the cost of your premiums and claimed as a tax offset by reducing the amount of tax payable on your taxable income.
The rebate amount is calculated based on your age and household income.
Can I avoid the impact of health insurance premium increase in 2023?
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 2.90%, 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.
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 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 its 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 $90k (or $180k 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 the annual rate rise.
How do I switch to a different health insurer?
There are lots of options to consider if you’re thinking about switching private health insurance but fortunately, you don't have to go it alone.
Talk to one of our health insurance experts by clicking the chat button on this page or compare health insurance quotes to see what you could save by switching.
COMPARE & SAVEThis guide is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.
*Compare Club does not compare all products in the market. The availability of products compared may change from time to time. Not all products available from our partners are compared and not all products are available to all customers.
^Department of Health, List of historical premium price changes by insurer for 2022, accessed 10th February, 2023.
^^ Commonwealth Ombudsman, Private Health Insurance - Quarterly Update 100: 1 July to 30 September 2021, accessed 25th January, 2022.
* Department of Health, Delivering Australia's lowest private health insurance premium change in 21 years, accessed 25th January, 2022.
** Based on 136,746 customers between 1 Jan 2018 - 23 December 2022.
*** You can avoid paying the Medicare Levy Surcharge only for the period you hold eligible health cover.
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