Health Insurance Just Went Up 4.41%. Here’s What to Do Now
On 1 April 2026, private health insurance premiums increased by a weighted average of 4.41% — the largest rise since 2017. If you noticed your latest premium was higher, you are not imagining it.
But the average masks a much bigger story. CHOICE analysis of the five largest funds (Bupa, HCF, HBF, Medibank, NIB) found that Gold-tier policies increased by an average of 13.3%, with some individual products up as much as 25%. Meanwhile, Basic and Bronze policies increased by just 2.6–3.3%.
More than 400,000 Australians have already downgraded from Gold cover in recent years, and 46% of policyholders planned to make changes around the April increase. If you are one of them — or wish you had acted sooner — here is what you can still do right now.
How Much Did Your Fund Go Up?
Not all funds increased equally. The approved increases ranged from 1.98% to 5.98%:
Above Average (Selected Funds)
| Fund | Increase |
|---|---|
| AIA Health Insurance | 5.98% (highest) |
| NIB | 5.47% |
| Medibank / AHM | 5.10% |
| HCF | 4.96% |
| Bupa | 4.80% |
Below Average (Selected Funds)
| Fund | Increase |
|---|---|
| GMHBA | 1.98% (lowest — 4th consecutive year below average) |
| HBF | 2.15% |
| HIF | 2.60% |
| Defence Health | 2.99% |
| Australian Unity | 3.98% |
Source: Minister for Health announcement, 17 February 2026. Full fund-by-fund breakdown via Compare the Market.
The Gold Tier Problem
The headline 4.41% average does not tell the full story. CHOICE found that across the Big 5 funds:
- Gold individual policies: average increase of 13.8% (~$442/year more)
- Gold family policies: average increase of 13.5% (~$858/year more)
- HCF Hospital Optimal Gold: up to 25% increase in all states
- Basic, Bronze, Silver: only 2.6–3.3% average increase
Over five years, Gold cover across the five largest funds has increased by a cumulative 71.1% — far exceeding the government-approved cumulative average of 14.8%. A key driver is what CHOICE calls “product phoenixing” — insurers closing a product and reopening an essentially identical one at a higher price. The government has introduced legislation to ban this practice.
Source: CHOICE, March 2026.
Seven Things You Can Do Right Now
1. Switch to a cheaper fund — yes, you can do this after April 1
You can switch health insurance funds at any time. Under the Private Health Insurance Act, portability rules mean:
- Your new fund must honour waiting periods you have already served for equivalent or lower cover
- You have up to 30 days between leaving your old fund and joining a new fund for portability to apply
- Your old fund must provide a transfer certificate within 14 days of your request
- No new waiting periods for equivalent cover
Switching from a high-increase fund (like AIA at 5.98%) to a lower one (like GMHBA at 1.98%) on the same tier of cover could save hundreds per year.
2. Downgrade your tier — but understand what you lose
Moving from Gold to Silver is the most common downgrade. Silver covers most common hospital treatments but excludes some procedures that Gold includes, such as:
- Joint replacements (hip, knee)
- Cataract surgery
- Some cardiac procedures
If you are under 50, generally healthy, and unlikely to need these procedures in the next few years, Silver may be a reasonable trade-off. If you have a known condition or are over 60, downgrading from Gold carries real risk.
Important: If you downgrade and later upgrade, you will serve waiting periods (up to 12 months for pre-existing conditions) on the additional benefits.
3. Increase your excess
Higher excess means lower premiums. Available options:
| Excess (Singles) | Excess (Families) |
|---|---|
| $0 | $0 |
| $250 | $500 |
| $500 | $1,000 |
| $750 | $1,500 |
The $750 single excess option was introduced to give consumers more control. The trade-off is straightforward: lower annual premiums but you pay more if hospitalised. For people who rarely use their hospital cover, a higher excess can reduce costs significantly.
About 16.6% of policyholders increased their excess in the past year.
4. Review your extras cover
Extras-only cover averages $839 per year. If your annual claims on dental, optical, physio, and other extras total less than your annual premium, you are paying more than you are getting back.
Check your claims history for the past 12 months. If you are consistently claiming less than your premium, consider:
- Dropping extras entirely and paying out-of-pocket
- Switching to a lower-tier extras package
- Keeping only the extras you actually use (e.g., dental only)
5. Check the age-based discount (under 30s)
If you are under 30, you are entitled to a discount on hospital cover:
- 2% discount per year under 30, up to a maximum 10% for ages 18–25
- The discount locks in at age 30 and stays until age 41
- Applies to hospital cover only
If you are 25 and took out hospital cover, you receive a 10% discount that continues until you turn 41. This incentive is designed to encourage younger Australians to take out cover early.
6. Check if you actually need private health insurance
Not everyone needs it. The Medicare Levy Surcharge (MLS) only applies above certain income thresholds:
| Income (Singles) | Income (Families) | MLS Rate |
|---|---|---|
| Up to $101,000 | Up to $202,000 | 0% — no surcharge |
| $101,001–$118,000 | $202,001–$236,000 | 1.0% |
| $118,001–$158,000 | $236,001–$316,000 | 1.25% |
| $158,001+ | $316,001+ | 1.5% |
2025–26 financial year thresholds. Thresholds increase from 1 July 2026. Family thresholds increase by $1,500 per dependent child after the first. Source: privatehealth.gov.au.
If your income is under $101,000 (single) or $202,000 (family), you pay no surcharge without private hospital cover. Run the numbers — the MLS at 1% on a $110,000 income is $1,100, which may still be less than the most affordable hospital policy.
7. Use the government’s comparison tool
The government runs privatehealth.gov.au — an independent comparison site that lists every health insurance policy available in Australia. Unlike commercial comparison sites, it has no commissions or affiliate bias.
You can also compare insurance products at internest.com.au/insurance to see plans ranked by estimated annual cost for your situation.
Lifetime Health Cover Loading: What to Know
If you first took out hospital cover after age 30, you pay a Lifetime Health Cover (LHC) loading — 2% for each year over 30. This loading:
- Is removed after 10 continuous years of holding hospital cover
- Allows up to 1,094 days (about 3 years) total absence without cover over your lifetime without the loading increasing
- Does not increase if you suspend your membership (rather than cancel)
If you are approaching the 10-year mark, cancelling now could reset your loading. If you are considering dropping cover, check how long you have held it first.
The Bigger Picture
The private health insurance industry is under significant pressure:
- The ACCC reports that insurers returned approximately $4.77 billion to consumers from COVID-era excess profits (as at 30 June 2025), including $1.71 billion in deferred premium increases (source: ACCC PHI Report 2024–25)
- The government has introduced legislation to ban product phoenixing in response to the Gold-tier pricing gap
- More than 246,000 policies were downgraded in the six months to June 2025 alone
- The government pushed insurers to resubmit premium requests before approving the 4.41% average
The trend is clear: consumers are voting with their feet, and the industry is under pressure to deliver better value or face further regulatory intervention.
Also check: several major banks are removing credit card travel insurance from May 2026.
Frequently Asked Questions
Can I switch health funds after the April increase?
Yes. You can switch at any time, and your new fund must honour waiting periods you have already served for equivalent or lower cover. Request a transfer certificate from your current fund and join a new fund within 30 days for full portability.
Will switching health funds mean new waiting periods?
Not for equivalent or lower cover. If you switch to the same tier (e.g., Gold to Gold at a different fund), your served waiting periods carry over. If you upgrade (e.g., Silver to Gold), you serve waiting periods only on the additional benefits — typically 2 months for most hospital treatments and 12 months for pre-existing conditions.
Is it too late to avoid the April increase?
The increase applied from 1 April, so your current premium has already changed. However, switching to a lower-cost fund or adjusting your cover now will reduce your costs from the date you make the change. Every month you wait is another month at the higher rate.
How do I compare health insurance policies?
The government’s privatehealth.gov.au lists every available policy and is commission-free. You can also compare at internest.com.au/insurance for plans ranked by estimated cost.
Should I drop private health insurance entirely?
It depends on your income, health needs, and risk tolerance. If your income is under $101,000 (single) or $202,000 (family), you pay no Medicare Levy Surcharge without cover. Consider your likely healthcare needs, your willingness to use the public system, and whether you have the savings to cover potential out-of-pocket costs.
What is product phoenixing?
Product phoenixing is when an insurer closes a health insurance product and creates a new, essentially identical product at a higher price. This has been a key driver of Gold-tier increases exceeding the approved average. The government has introduced legislation to ban this practice.
General information only, not personal financial or health advice. Premium increase figures sourced from the Minister for Health announcement, 17 February 2026 and CHOICE analysis, March 2026. Individual outcomes depend on your fund, tier, age, and location. Estimates may vary.