Health insurance hike alert: Will your budget survive?

As if the current cost-of-living crisis wasn’t enough to have Australians tightening their belts, a new financial challenge looms on the horizon. Health insurance premiums are set for what could be the biggest rise in recent years, with potential increases that could see millions of Aussies digging deeper into their pockets this year.

The forecast is not looking friendly for the budget-conscious, with Compare Club predicting a possible 6% increase in health insurance premiums from April 1. This hike translates to an average jump of $234 annually. Kate Browne, the head of research at Compare Club, cautions that while a 6% increase is the ‘worst-case’ scenario, it’s a situation worth preparing for.

A predicted 6% rise in health insurance premiums could push Aussie families’ budgets to the limit. Image Source: geralt / Pixabay

‘In the midst of a cost-of-living crisis, every dollar counts,’ Browne emphasises. ‘Now more than ever, it’s critical for Australians to remain vigilant and take proactive steps like reviewing their policies and comparing providers.’

The impact of such an increase is not to be underestimated. For retired families, this could mean shelling out an additional $369 for their health insurance in 2025, bringing their total to nearly $6,000. Couples over 65 might face an extra $358 on their premiums, while young families could see an increase of up to $248 per year. Singles and single-parent households are not spared either, with potential increases of $153 and $224, respectively.

This forecasted rise is a significant leap from previous years. April 2024 saw a jump of 3.03% in premiums, 2023 had a 2.9% increase, and 2022 experienced a 2.7% hike. The trend is clear: health insurance is becoming a heavier financial burden year after year.

But it’s not all doom and gloom. Compare Club urges Aussies to shop around to mitigate this year’s increase. By switching insurers, singles, couples, families, and single-parent families could save anywhere from $137 to $361. Insurers often entice new customers with perks, incentives, and promotions, such as waived waiting periods and limited-time free coverage. It’s worth exploring these options to secure a better deal.

So, when will we know the exact figures for the health insurance increase? Health funds submitted their proposals to the government by November 14, and an announcement is expected anytime between now and March. Last year, insurers proposed a 6% rise, but this was rejected by the Health Minister.

David Koch, Economic Director at Compare the Market, reassures Australians that any increase is not taken lightly. ‘Australians should rest assured knowing that any increase won’t be a cash grab from health funds,’ he says. ‘There’s a strenuous process that they need to go through to get their premium adjustment approved.’

Health funds must justify their proposed premium adjustments to the Department of Health and The Australian Prudential Regulation Authority, considering factors such as doctor fees, medical equipment costs, hospital procedure costs, health professional wages, and the increased cost of paying out claims.

As health insurance premiums are set to rise, being proactive is key. Have you experienced a significant increase in your health insurance premiums? How are you planning to handle the potential rise? Drop your thoughts in the comments—we’d love to hear from you!

Also read: Why your insurance premiums are skyrocketing

Abegail Abrugar
Abegail Abrugar
Abby is a dedicated writer with a passion for coaching, personal development, and empowering individuals to reach their full potential. With a strong background in leadership, she provides practical insights designed to inspire growth and positive change in others.

1 COMMENT

  1. My 12 months contents insurance was renewed in January. Actually dropped a few cents! But I was warned that next year’s will have a compulsory increase, for flood cover. From what I was told, will be a sizeable increase.

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