Health insurance price rise letters land: how to outsmart the hike
10 Mar 2026
Australians are being urged to review their private health insurance as the April 1 price hike letters start to land in people’s inboxes.
Major health funds, including HCF, Medibank, nib and ahm, have already started contacting members with details of their individual price changes.
While the government approved a price rise of 4.41%, this is an average and the increase applied to individual policies will vary significantly.
Canstar’s analysis of pre- and post-price hikes from last year shows the cost of an individual gold policy rose by an average of 11.6% between March and April, when last year’s approved average was just 3.73%.
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| Last year’s change in average hospital premiums by cover type | |
|---|---|
| Hospital tier | 2025 increase |
| Gold | +11.6% |
| Silver | +4.8% |
| Bronze | +2.7% |
| Average | +3.73% |
Source: Canstar. Based on individual hospital insurance policies on Canstar’s database, excluding ‘plus’ tiers. Gov rebate of 16.405% in Mar-25 and 16.192% in Apr-25 applied. Averages based on state averages, weighted by % of hospital insured persons (APRA).
Majority of Aussies reviewing their cover in response to premium hikes
Canstar’s new survey findings reveal that more than half of Australians with private health insurance are preparing to reassess their cover ahead of the April 1 premium increase.
According to the February 2026 survey of 2,254 insured adults, 52% plan to make changes in response to the upcoming price hikes to help make their cover more affordable.
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| Planning to make changes to their cover in response to April price change | |
|---|---|
| Yes | 52% |
| No | 33% |
| Unsure/too early to say | 15% |
Source: Canstar survey in February 2026 of 2,254 Australian adults with private health insurance.
Among those planning changes, common actions include:
- 24% plan to switch to a different insurer to find a cheaper policy
- 18% plan to increase their excess to lower their premium
- 17% plan to reduce or remove extras cover
- 13% plan to remove or reduce hospital cover
- 13% plan to downgrade their level of cover, such as from gold to silver
New data confirms Australians still sticking with private cover
Despite years of price rises, the proportion of Australians with private hospital cover has grown.
The latest quarterly data from APRA shows hospital treatment membership rose by 2.3% in the 12 months to December 2025. As a proportion of the population, it represents 45.6%.
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| Hospital treatment membership: APRA | ||
|---|---|---|
| Insured persons | Change from previous year | |
| No. of people with hospital cover | 12.7 million | +287,393 +2.3% |
| % of people with hospital cover | 45.6% | +0.3 %-points |
Source: APRA Quarterly private health insurance membership and benefits statistics, released 27 February 2026, prepared by Canstar.
However, people are migrating to lower levels of cover, with the proportion of insured people with gold hospital insurance dropping from 40% right before COVID to 28% in December 2025, according to the latest data from the Australian Government Department of Health, Disability and Ageing.
How to outsmart the price hike
There are several ways Australians can reduce costs without ditching their cover entirely.
- Switch providers within the same tier: Canstar research shows if an individual switched from the average-priced gold hospital insurance to the lowest, they could potentially save $1,387 in a year, without downgrading their cover or re-serving waiting periods.
- Ask for a discount: Many funds offer new customer discounts, such as a number of weeks free, particularly for extras cover. If you’re an existing member, ask for the discount as well.
- Pay in advance: Most insurers will let you beat the price hike by pre-paying your health insurance a year or more in advance at today’s prices, with HCF, Westfund and Health Partners offering prepayment of up to 18 months. This can potentially save people money if they have the cash at hand and don’t have a better investment opportunity for the funds. If you pay your premiums in advance, that shouldn’t stop you from being able to switch insurers. According to PrivateHealth.gov.au, the old fund should refund the unused portion of your policy.
- Mix and match: Don’t feel you have to have your hospital and extras with the same insurer. It’s worth getting a quote from different insurers just in case it can save you money.
- Consider your level of cover: This strategy has its risks but if you no longer need a high level of cover (e.g. you don’t require obstetrics), you could consider downgrading, however, if you want to upgrade later, you will have to re-serve waiting periods.
Canstar’s data insights director, Sally Tindall, says, “Health funds have started sending out their premium increase letters ahead of the April 1 changes and it’s important for members not to ignore them.”
“The approved 4.41 per cent rise is an average, not a cap, so the increase on your policy could be higher. This is the moment to check exactly how much your premium is going up by.
“Last year, Canstar’s research found gold policyholders were hit with an average increase of 11.6 per cent, not the government’s approved average of 3.73 per cent. If that trend repeats this April, some Australians could see their annual premiums jump by hundreds of dollars.
“Don’t assume you have to just wear the price increase. Our survey shows more than half of policyholders are ready to push back, with many planning to switch providers, ditch their extras or increase their excess to keep their health insurance affordable.
“The good news is that you don’t necessarily have to downgrade your cover to save. Canstar research shows switching from the average to the lowest-priced gold policy could save someone over $1,300 a year without having to re-serve waiting periods or accept a lower level of cover.
“Now is the time to be proactive. If you have the cash on hand, consider prepaying your premium for the year ahead to lock in today’s rates. If you’re sticking with your current fund, don’t be afraid to ask for a discount or a sign-up deal.”
This article was reviewed by our Consumer Editor Meagan Lawrence before it was updated, as part of our fact-checking process.
