After setting out clear expectations for the sector and asking insurers to resubmit their premium requests multiple times, the Government has approved an average premium increase of 4.41 per cent increase from 1 April 2026.
This is moderately higher than last year's increase of 3.73 per cent and reflects the rising costs of providing medical and hospital services, which rose 5 per cent last financial year.
The Albanese Government will provide $7.9 billion this year to Australian policyholders through the private health insurance rebate after our Government reintroduced indexation of the rebate threshold in 2024.
In the 12 months to 30 September 2025, insurers paid out increased benefits of more than $26.7 billion in health, medical and extras benefits.
This includes:
- Hospital treatment: up $1.2 billion to $20 billion (up 6 per cent)
- General treatment: up $341 million to $6.7 billion (up 5 per cent)
- Hospital accommodation benefits per episode: up 5 per cent, the highest growth since this data was first captured in 2008.
This year's premium rise also reflects increasing wage bills and securing the viability of private hospitals.
We've been working to get insurers to increase the hospital benefits ratio to provide more support to hospitals and staff.
As a result, the hospital benefits ratio increased to 85.9 per cent in September 2025 - up from a low of 83 per cent in 2022-23.and it is projected to increase further, to 87 per cent for the 12 months from 1 April 2026.
While this is encouraging, there is still more work for insurers to do to return to the pre-pandemic rate of around 90 per cent.
The private health insurance premiums have risen by an average of 3.52 per cent under the Albanese Government, compared to average increases of 4.26 per cent under the former coalition Government.
Each insurer's average change will be published on health.gov.au. It is each insurer's responsibility to clearly explain to their policy holders any changes to premiums, the reasons why they have made this decision and their policy holders' options.
Consumers are encouraged to carefully consider their insurance needs and use the government website - www.privatehealth.gov.au - to compare the range of products and prices on offer from all insurers.
The Government continues to work to deliver better value for Australians who hold private health insurance.
This includes introducing legislation this month to outlaw "product phoenixing", where insurers close a product and open an identical one at a higher price, or reduce the value of a product.
Quotes attributable to Minister Butler:
"The Government understands the pressure health insurance premium changes put on Australians and decisions about private health insurance premiums must put consumers first.
"This premium round has been guided by my commitment to maintain the value of private health insurance for Australians, while making sure the sector plays its part in supporting private hospitals facing rising costs and significant challenges.
"This year's decision reinforces that premium increases must be backed by clear evidence and contribute to system-wide improvements, not just insurer balance sheets.
"Australians deserve transparency, fair pricing and confidence their premiums are being directed where they are needed most."
"I expect private health insurers and hospitals to work hard to bring down costs and keep future price increases to a minimum."
