Labor approves 3.73 per cent increase on private health insurance premiums from April 1

About 15 million Australians will see an increase to their private health insurance premiums from April 1. Here’s how much they’ll rise by.

Private health insurance premiums will go up an industry average of 3.73 per cent from April 1 after Health Minister Mark Butler intervened to lower proposals put forward by funds.

Mr Butler called on insurers to resubmit their premium increase claims three times before approving the figure on Wednesday.

Previously insurers had put forward figures of up to 6 per cent, nearly double the 2024 increase of 3.03 per cent.

While 3.73 per cent is the largest premium hike since 2018, increase were skipped or lowered during the Covid pandemic.

Nib will increase its premiums by an average of 5.79 per cent, while HBF announced a 2.8 per cent average increase - the lowest out of the five major health funds.

Mr Butler said the Labor government had achieved a “better deal for the 15 million Australians with private health insurance”.

“It is my responsibility as Health Minister to ensure that any private health insurance premium increase is justified and proportionate,” he said.

Health Minister Mark Butler approved the industry average premium increase on Wednesday. Picture: NewsWire/ Martin Ollman

“In December, I wrote to every single one of the 29 insurers asking that they sharpen their pencils and provide us with an increase that was more in the interests of their members.

“Based on the resubmissions, I was not prepared to tick and flick their asks and instead asked them to resubmit again.”

Labor has also taken aim at Peter Dutton for previously approving a premium increase of the largest annual premium increase of 6.2 per cent when he was the health minister in 2013.

According to comparison site Canstar, the average combined hospital and extras health insurance for singles under the age of 36 is about, $3199, with that figure rising to $3719 for established people aged between 36 to 59, and $4176 for people aged 60 and over.

Under the 2025 premium increase, the average costs will increase to $3318, $3857, and $4331 respectively.

Industry group Private Healthcare Australia (PHA) said the increase was below health inflation of 4 per cent, and the “lowest increase possible”.

“The increase of 3.73 per cent, agreed with federal regulators, is as low as the health funds can go without seriously squeezing private hospitals and other providers,” said PHA chief executive Rachel David.

“In addition to costs rising, health insurers are also facing unprecedented pressure from the private hospital sector for additional funding.”

She added that health funds were conscious of cost of living pressures affecting customers, blaming inflation for the rising private insurance costs.

“We also need to ensure hospitals are adequately funded so they can manage the significant challenges they have experienced due to the pandemic, and the subsequent inflationary economy,” said Dr David.