How to ‘stop the sting’ on your budget
27 February, 2025: Australian households face another cost-of-living challenge in 2025 as health insurance will increase by an average of 3.73 percent on 1 April, adding an average extra $146 to people’s premiums.
But analysis of over 289,115 policies from financial marketplace Compare Club suggests the true cost to Aussies could be closer to $253 for couples and $221 for families based on the average increase of Australia’s five biggest health funds (Bupa, Medibank, HCF, nib, and HBF), who account for over 80% of policies in the country.
When their respective rate rises are taken into account the “Big Five” average is 4.52%, which is 21% higher than the official average increase.
Some Australians will be harder hit than others. Some of the biggest losers in this increase include:
Over 65s, Retired couples, who are most likely to be with Australia’s “Big Five”, face paying an additional $273, taking their average premium to $6,190.
Members of Police Health, who face an average increase of 9.56%
Middle age families, who face average increases of between $239 to $271
This is the highest premium cost increase since 2018 when premiums rose by an average of 3.95%. It comes after the Federal Government rejected the insurance industry’s request for a 6% increase before Christmas, although four funds are increasing premiums by an average of over 5%.
Compare Club’s Head of Research, Kate Browne, says with cost of living pressures, all Australians should use this opportunity to see if they can cut the cost of their premiums and get more value from their cover simply by reviewing and comparing the best deals in the market.
“Being hit with this increase is the last thing most Australians need after hikes in the cost of car insurance and energy, but the good news is by taking some quick steps to review and compare policies it’s possible to save around $295 a year on average. “Many insurers are desperate to win your business at this time of year, so may waive waiting periods or even offer up to six weeks free on some policies when you switch, which can really push up the savings. It’s not as painful as a lot of people imagine either. You can often switch your cover in under half an hour if you’re clear on what you need or use an expert broker.”
Kate’s top tips for maximising your health insurance
1. Don’t wait to take action. According to research from IPSOS, one in five Australians hasn’t reviewed their health insurance in over five years. The annual premium increases add up over time and many extras policies become outdated.
Kate Browne says the longer you’ve left it, the more you can save, “Many Australians who’ve not reviewed cover in many years often tend to be substantially overpaying. Our team regularly hears stories of retirees on Gold hospital cover who have been paying for pregnancy cover they’ll never use. Often there’s hundreds of dollars to be saved by dropping down a level - and you won’t have to serve new waiting periods if you switch.”
2. Basic policies are junk. Beware of Downgrading Cover:
Basic-level hospital cover is just that - basic. It will help you avoid taxes and ambulance costs but provides very little beyond that. However there are Bronze policies that provide far more cover for only a few dollars extra a month. Kate Browne says these policies can be just as big a waste of money as overpaying for Gold cover. “Last year Aussies wasted $26.4m on Basic policies when for as little as an extra $12 dollars a month they could have a Bronze policy that provides good cover for a wide range of health issues. Beware of anybody who tries to get you to drop down to this level of cover as Basic policies are a false economy.” 3. Maximise your extras coverage. Hospital cover is often where the biggest savings can be made, but getting the right extras cover is a way to offset a large amount of your premiums during the course of the year. Moving to an extras policy you’ll actually use means you can claim thousands of dollars back in rebates, and some funds even allow you a degree of flexibility in adding items into your cover. Compare Club has found the average family leaves $16,580 on the table in unused extras each year, which is great for the health fund but less so for your bank balance. “Extras policies are so hard to compare like for like, so this is where it can really pay to speak to an expert,” says Kate. “They’ll look at how much you’ll realistically use, if there are local dental networks that can give you a 100% back, and even help you weigh up whether it’s more cost effective for you to opt for a fixed annual limit or to claim a set percentage back each time.”
4. Utilise the adult children policy hack.
One little-used health insurance hack for older families is to keep adult children on the family policy until they turn 31. Many health funds offer this for twenty-somethings who aren’t married or in a de facto relationship, but don’t tend to shout about it.
You’ll have to pay a one-off loading fee, but the savings can really stack up. Not only will the family save anywhere upwards of $1,010 but the children will often be on a higher level of cover than that they’d usually be able to afford by themselves.
“This trick is one of the biggest savings secrets in the health insurance market,” says Kate. “Given the loading fee doesn’t change, even if you have more than one adult dependent on the policy, it’s a no-brainer for big families.”
Despite the heavy hike for many households in 2025, Kate Browne remains optimistic. “It’s easy to feel like it’s too difficult, or that all health insurance will cost the same. But there are some genuinely good value policies on the market and major savings to be had if you know where to look. It can really help to get an unbiased recommendation at this time of year, as nobody should have to wear this year’s increase.”
-ENDS-
NOTES FOR EDITORS
*Compare Club can provide models of potential healthcare premium increases upon request
Media enquiries:
Alice Cooke
Media + Capital Partners
0484 747 472
alice.cooke@mcpartners.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 200 passionate staff across Sydney, Melbourne, Brisbane and another 50 staff in Indonesia and the Philippines.
