Australians will once again have less time to budget for their health insurance price increase this year, following a delay in announcing the annual premium rise which typically rise on April 1 each year.
Premiums increased by an average of 3.03% in 2024 and is expected to be higher in 2025.
Based on Money.com.au’s analysis, the announcement date for private health premium hikes has been getting progressively later over the past four years. In 2024, the announcement landed on March 5 — about a month later than in 2023 (February 6). It was more than two months later than in 2022 (December 23, 2021) and 2021 (December 21, 2020).
Disconnect between government and health insurers creates delays in premium increase announcements
Consumers face another delayed health insurance premium hike announcement in 2025 after Federal Health Minister Mark Butler twice rejected private health insurers’ proposed premium increases for this year. A similar rejection last year contributed to a delayed announcement. In both years, private health insurers initially proposed premium increases of 5% to 6%.
Money.com.au’s general manager of Health Insurance, Chris Whitelaw, says the repeated delays in premium increase announcements leave consumers with little time to do their due diligence.
“The ‘health hike hold-up’ leaves Aussies little time to budget for the premium increase. People deserve fair warning so they can compare policies, switch providers, or find a better deal before the hike kicks in,” he says.
“There seems to be a disconnect between the Government and private health funds on how much more Australians should pay for their cover in 2025. But with prices rising and adding to cost-of-living pressures, I’m sure they would all agree that leaving consumers in the dark until the last minute isn’t a great outcome. It also undermines trust and confidence in the system."
The rising cost of healthcare and its impact on premiums
Health insurance premiums increase each year to keep up with the rising costs of hospital, medical and other health-related services.
The cost of hospital and general medical services in Australia has risen by 9.3% in the year to September 2024. Every year, private health insurers must submit their proposed premium increases to the Federal Health Minister for approval before implementing any changes. This process is called the annual premium round. The Health Minister has the final say on annual premium rises.