Premiums to rise 4.41% as the government approves an increase in private health insurance
Australians with private health insurance will face higher premiums from April, after the Federal Government approved an average increase of 4.41 per cent for 2026.
Health Minister Mark Butler announced the change on Tuesday, confirming the rise will take effect from 1 April. The increase follows months of negotiations with insurers, who were asked to resubmit their pricing proposals multiple times.
The approved rise is moderately higher than last year’s average increase of 3.73 per cent and reflects growing costs across the health system, including hospital services, medical treatments, and staff wages. Medical and hospital service costs rose by around five per cent in the past financial year, contributing to pressure on insurers.
According to the government, insurers paid out more than $26.7 billion in benefits in the year to September 2025, including $20 billion for hospital treatment and $6.7 billion for general treatment such as extras cover. Hospital accommodation benefits per episode also increased by five per cent, marking the highest growth since records began in 2008.
The government said it will provide $7.9 billion in rebates to help offset costs for
policyholders this year, following the reintroduction of rebate indexation in 2024.
Officials also noted improvements in the hospital benefits ratio, a measure of how much insurers pay out relative to premiums, which rose to 85.9 per cent in September 2025 and is expected to reach 87 per cent in the coming year. However, this remains below per-pandemic levels of around 90 per cent.
Minister Butler said the decision aimed to balance affordability for consumers with the financial sustainability of private hospitals and the insurance sector.
“The Government understands the pressure health insurance premium changes put on Australians,” he said, adding that insurers must ensure premium increases are justified and support improvements across the health system.
Each insurer’s specific premium adjustments will be published online, and consumers are being encouraged to review their cover and compare options.
The government has also introduced legislation to ban “product phoenixing”, a practice where insurers close and reopen similar policies at higher prices, to improve transparency and protect policyholders.
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