Your private health insurance premium just went up. Why?

Private health insurance premiums increased on Wednesday.

It comes after the Health Department approved an average 4.41% increase in February, which it said was due to rising costs in medical and hospital services.

It is the biggest increase in premiums in almost a decade.

The Coalition says it’s concerned added cost-of-living pressures could push more people into the “already overburdened” public system.

Private health

In Australia, medical expenses that aren’t included in the taxpayer-funded national health insurance scheme, Medicare.

This includes dentistry, physiotherapy, and private hospital access.

Prices vary based on how much a consumer’s policy covers.

Private health insurance that only covers hospital access costs an individual $1,020–$3,240 annually, according to Money.com.au.

Increase

Private health insurance companies ask the Health Minister if they can increase their premiums each year. The minister can deny the request if it isn’t in the public interest.

In February, Federal Health Minister Mark Butler approved an average private health insurance premium rise of 4.41%.

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In Butler’s statement, he said he had asked insurance companies to “resubmit
their premium requests multiple times”.

At the time, Butler said the decision “reflects the rising costs of providing medical and hospital services”.

In the 12 months to October 2025, insurers paid out 5% more than the previous year, a total of $26.7 billion.

Impact

The premium increases are an average, meaning rises vary depending on the insurer and the type of policy held.

AIA Health Insurance will apply the highest rise at 5.98%.

Australians could pay extra hundreds of dollars each year for cover, depending on their policy.

Here’s a breakdown of what Australians with hospital cover were paying across the country before the rate hike.

Opposition

Shadow Health Minister Anne Ruston said the Government’s decision comes “at a time when household budgets can least afford it.”

She pointed to a recent “mass exodus” of Australians from the top level of coverage in recent years, warning it could have “a serious impact on our entire health system.”

“This will only add more pressure to our already overburdened public hospitals.”