Australians are continuing to take out private health insurance despite rising costs, with APRA quarterly statistics showing the number and proportion of people with cover increased in the June quarter.
This increase in people with private health cover comes after the April price hikes, which saw some premiums rise by up to 13%.
The APRA data, released last week, showed 12.8 million Australians had hospital treatment cover as of 30 June 2026, the equivalent of 45.8% of the population. This is an increase of 0.4 percentage points compared to the June 2025 quarter.
The number of Australians with extras cover also increased, reaching 15.5 million people, or 55.5% of the population. This is also a rise of 0.4 percentage points compared to a year ago.
People with private health insurance cover: APRA | ||||
|---|---|---|---|---|
Private hospital cover | Extras cover | |||
No. of ppl | % of pop | No. of ppl | % of pop | |
Jun-25 | 12.5m | 45.4% | 15.2m | 55.1% |
Jun-26 | 12.8m | 45.8% | 15.5m | 55.5% |
Difference | +292,743 | +0.4 | +315,884 | +0.4 |
Source: APRA quarterly private health insurance membership and benefits summary. Prepared by Canstar.
Membership growth continues despite rising costs
This growth in membership comes despite the 4.41% average premium rise on 1 April 2026, the largest government-approved average increase since 2017.
Yet Canstar analysis shows the most expensive policy tiers rose by a lot more, with Gold premiums rising by an average of 13%, adding an estimated $493 a year on to the average-priced policy for an individual.
The cost pressures don’t stop at premiums.
The average out-of-pocket payment for a hospital episode/service reached $513 in the June 2026 quarter, up 7.5% on the same time last year.
Out-of-pocket per episode/service | ||
|---|---|---|
Jun 25 | Jun 26 | Annual change |
$477 | $513 | +$36 (+7.5%) |
Source: APRA quarterly private health insurance membership and benefits summary. Prepared by Canstar.
One of the reasons for rising insurance and out-of-pocket costs is increasing medical expenses, with the APRA data showing the average annual hospital benefits paid per insured person rose from $1,522 to $1,553 over the 12 months to June 2026.
Policyholders downgrading to reduce costs
Rising costs have pushed Australians into lower levels of cover over the last five years.
Data from the federal government’s Department of Health, Disability and Ageing shows the Gold tier was the most popular level of cover in March 2021, with 38% of insured people on this tier. Today, that has dropped to just 27%, with the proportion of people with silver cover rising from 36% to 40% in this time.
Higher costs yet most don’t hunt for a better offer
Canstar surveyed 7,267 Australians with private health insurance and found 44% had never switched providers. Of the 8% who switched in the past 12 months, 85% said they were better off, whether through lower costs, improved cover or both.
Potential savings from switching
Canstar research shows the gap between the average and lowest priced gold hospital and extras policies for an individual is more than 30%, which equates to a potential saving of $1,681 in a year for the same level of cover.
Potential annual savings from switching | |||
|---|---|---|---|
Tier | Average | Min | Difference |
Basic | $1,705 | $1,317 | -$388 (-23%) |
Bronze | $2,006 | $1,611 | -$395 (-20%) |
Silver | $2,509 | $2,036 | -$473 (-19%) |
Gold | $5,359 | $3,678 | -$1,681 (-31%) |
Source: Canstar. Based on combined hospital and extras insurance policies on Canstar’s database. The Private Health Insurance Rebate, Tier 1 for under 65s, of 16.079% in Jul-26 has been applied to premiums. National average based on state averages weighted by proportion of hospital insured persons per APRA Quarterly Private Health Insurance (March 2026).
Loyalty is costing households
Canstar’s Data Insights Director, Sally Tindall, says, “Australians are holding onto their private health insurance with a vice-like grip, even in the face of steep cost increases across the board.”
“This latest APRA data shows private health insurance membership continues to grow despite higher premiums and out-of-pocket expenses, suggesting factors beyond price, including the Medicare Levy Surcharge and Lifetime Health Cover loading, are driving people to take out and retain their policies.
“What’s concerning is that some households are being forced into a lower level of cover because they simply can’t afford the policy they want.
“Despite the price pressures, our research shows 44 per cent of policyholders have never switched providers, and that loyalty is costing some households hundreds, if not thousands.
“Our analysis shows a massive 31 per cent price gap between the average and the lowest-priced Gold hospital and extras policy – a potential saving of over $1,680 a year for an individual without having to compromise on their level of cover.”
