Australians already struggling with sharp rises in household expenses will face a 3 percent bump in private health insurance premiums—the largest rise in five years after the federal government changes.
About 14.7 million Australians hold private health insurance coverage with the 3.03 percent increase higher than the 2.9 percent in 2023, and 2.7 percent in 2022.
Federal Health Minister Mark Butler trumpeted the rise saying Australians were getting “value for money from their private health insurance which is rising at a much slower rate than the increase in wages the age pension and inflation.”
The increases to health premiums pale in comparison to other insurance products like home, contents, and income protection which rose by an average close to 17 percent in 2023.
In comparison, wages have risen 4.2 percent and inflation remained at 4.1 percent in 2023.
In a release from the Department of Health and Aged Care, Minister Butler said he worked with the insurance sector to minimise the rises and lessen the financial impact on the public still reeling from the cost of living crisis, high inflation, and COVID hangover.
“I wasn’t prepared to just tick and flick the claims of health insurers, as the opposition asked me to do. I asked insurers to go back and sharpen their pencils and put forward a more reasonable offer for the 15 million Australians with private health insurance.”
Australian Unity Health has the lowest increase of the major providers at 1.42 percent, followed by AIA at 2.19, while CBHS Corporate Health Pty Ltd has posted the largest increase at 5.82 percent.
Minister Butler said upcoming tax cuts that will see middle-income earners get a 2.5 percent relief will offset rises in premiums.
“While we know that any increase will be hard to bear during a global cost of living crunch, the Albanese government has ensured that health insurance premiums will fall relative to Australians’ wages and Labor’s tax cuts mean all Australian taxpayers will get a tax cut on 1 July, so Australians earn more and keep more of what they earn.”
“Private health insurers must ensure their members are getting value for money. When costs rise, Australians want to know that higher premiums are contributing to system-wide improvements, like higher wages for nurses and other health workers and ensuring that affordable services are available,” Mr. Butler said.
The government has already provided a $7.3 billion rebate to private health policyholders.
