The good news is that you’re not powerless in the face of these changes. By taking a little time to understand the factors driving health insurance costs and learning how to navigate your options, you can make confident, informed decisions about your cover. This guide is here to support you through that process with straightforward information, practical tips and tools to help you find a policy that suits your health needs and your budget.
Key facts
- The average health insurance premium increased by 3.73% in 2025, the highest rise since 2018
- Australians aged 60 and over pay an average of $4,176 annually for hospital and extras cover
- Combined hospital and extras cover for families typically ranges from $6,000 to $8,500 per year
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Premium Increases in 2025
In 2025, your cost for private health insurance may have risen by an average of 3.73%. This increase, the most substantial since 2018, adds roughly $146 to your annual premiums. Your actual increase depends on which health fund you’re with, as some introduced significantly higher adjustments than others. Knowing how your insurer compares can help you decide whether it’s time to shop around.
Health Fund | Average Premium Increase (%) |
Medibank | 3.99 |
Bupa | 5.10 |
HCF | 4.95 |
nib | 5.79 |
HBF | 2.80 |
Australian Unity | 4.89 |
Teachers Health | 2.94 |
GMHBA | 2.44 |
Defence Health | 3.30 |
CBHS | 2.84 |
Source: Privatehealth.gov.au (April 2025)
Several of the largest insurers, such as Bupa, nib and HCF, have increases above the industry average, while others, including HBF, GMHBA and CBHS, are below it. These variations underscore the importance of comparing your current plan with available alternatives to determine if switching providers could result in significant savings. These differences make it essential to review your own premium notice and consider switching providers if you find a more favourable option. It’s also a good idea to understand how these changes might affect your budget now and in the future.
How Age and Coverage Type Affect Your Premiums
Your age is one of the biggest influences on what you’ll pay for health insurance. The older you are, the more likely you are to use health services, which is reflected in your premium. The type of cover you choose, whether it’s basic, mid-level or comprehensive, also plays a big role in determining your costs. Here’s what Australians are paying on average for hospital and extras combined:
Age Group | Average Annual Premium (Hospital + Extras) |
Under 36 | $3,199 |
36-59 | $3,719 |
60 and over | $4,176 |
Hospital vs. Extras Cover: What You Need to Know
When choosing private health insurance, you can opt for Hospital cover, Extras cover or both. Hospital cover helps pay for your treatment in a private hospital or as a private patient in a public hospital, including surgery, hospital stays and specialist care. Extras cover contributes to costs for services outside of hospital, like dental, physio, optical and massage. Many of us choose a combined policy to get the best of both worlds.
Typical Annual Premium Ranges by Cover Type:
Cover Type | Individual | Couple | Family |
Basic Hospital Only | $1,200-$2,000 | $2,400-$3,800 | $2,800-$4,200 |
Extras Only | $400-$900 | $800-$1,500 | $1,000-$1,800 |
Hospital + Extras | $2,800-$4,300 | $5,600-$7,800 | $6,000-$8,500 |
You should also understand what these covers typically include:
Hospital Cover
Hospital cover is designed to help pay for treatment if you are admitted to hospital, whether it’s for planned surgery, emergency care, or ongoing health conditions. It can provide access to private hospitals, choice of doctor, and reduced wait times for procedures. Policies are structured into tiers; Basic, Bronze, Silver and Gold, each offering different levels of cover, from essential treatments to more comprehensive protection.
- Hospital accommodation and theatre fees
- Doctor and specialist fees in hospital
- Emergency and elective surgeries (depending on tier)
- Mental health and rehab services (in some tiers)
Extras Cover
Extras cover, also known as general treatment cover, supports your everyday health needs outside the hospital. This can include preventative and maintenance care such as dental checkups, new glasses, physiotherapy sessions, or remedial massage. While not life-threatening, these services can be essential for long-term wellbeing and are not typically covered by Medicare. Choosing Extras cover gives you more flexibility and reduces your out-of-pocket costs for routine healthcare expenses.
- General and major dental
- Optical (glasses and contact lenses)
- Physiotherapy and chiropractic
- Podiatry, acupuncture and remedial massage
What Drives Your Premium Costs?
Your premium is influenced by several factors. These include your age, the cover you choose, where you live and your insurer’s pricing structure. Government incentives like the private health insurance rebate can help reduce what you pay. Understanding these elements can help you make smarter decisions when choosing or reviewing your policy.
Tips to Save on Your Health Insurance
If your premiums are stretching your budget, there are ways to reduce your costs without losing valuable benefits. Start by reviewing your policy regularly to make sure it still meets your requirements. Comparing plans from other insurers could reveal a more affordable option with similar cover. Increasing your excess or choosing direct debit payments may also unlock discounts.
Tips at a glance:
- Review and update your policy each year
- Compare options across providers
- Raise your excess if it suits your needs
- Pay annually or via direct debit for discounts
- Check your eligibility for government rebates
Frequently Asked Questions and Answers
Why have health insurance premiums increased in 2025?
Premiums are rising due to a mix of factors including higher costs for hospital services, medical technologies and workforce wages. Demand for private health services has also gone up, especially in areas like elective surgery and mental health support. To stay financially stable, insurers adjust their rates annually. It’s essential to review your policy to understand how these changes affect your individual premium and whether you’re still receiving good value.
How do I know if my premium has changed?
Insurers are required to notify you before any premium increase takes effect. This usually happens via email, postal mail or a notification in your online account. If you’re unsure, you can log into your member portal or contact customer service directly. It’s always worth checking the updated cost against other policies to see if switching could offer you a better deal.
Can I reduce my health insurance premium without losing coverage?
Yes, you can tailor your policy to suit your needs and budget better. For example, you might remove extras you no longer use, switch to a more cost-effective provider or increase your excess to lower the upfront premium. Some funds offer age-based or loyalty discounts, so it’s worth asking about those as well. Just make sure the essential benefits you need are still included in the revised policy.
What is the Medicare Levy Surcharge and how can I avoid it?
The Medicare Levy Surcharge (MLS) applies to singles earning over $93,000 and couples or families earning over $186,000 who don’t hold an eligible hospital policy. The surcharge ranges from 1% to 1.5% of your income, depending on your earnings. To avoid it, you need to take out private hospital cover that meets the government’s requirements. In many cases, the cost of the policy is lower than the amount you’d pay in the surcharge, so it’s often financially beneficial to get covered.
Does everyone pay the same for health insurance?
No, your premium is based on personal details such as your age, where you live, your income and your chosen level of cover. Families, singles and couples may all have different rates even within the same insurer. Factors like excess amounts, lifestyle options and additional discounts also play a role. That’s why it’s important to compare and customise your cover rather than assume a one-size-fits-all solution.