The Short Version
- Health insurance premiums will go up by an average of 3.73% on 1 April 2025 – with some funds raising their prices much higher.
- The Federal Government rejected initial premium-rise proposals and forced funds to resubmit more reasonable increases.
- Not-for-profit funds, on the whole, continue to outperform for-profit ones when it comes to keeping costs lower for members.
Another price hike: Why health insurance premiums are rising by 3.73% in 2025
Every year, Australians with private health insurance are stung by annual premium increases on 1 April – and, you guessed it, 2025 will be no different. This year, premiums will go up by an average of 3.73% across all health funds.
For millions of households already grappling with higher interest rates and cost-of-living pressures, this latest hike could feel particularly painful. But what’s behind the increase – and is it really justified?
Why do health insurance premiums go up on April 1st every year?
Health insurers argue that annual premium increases are necessary to cover rising healthcare costs, including:
- Higher wages for nurses, doctors and hospital staff.
- The growing cost of medical technology and imported devices.
- More demand for mental health and chronic-disease treatments.
- Inflation pressures across pharmaceuticals, diagnostics and hospital services.
But these justifications haven’t gone unchallenged. Health Minister Mark Butler recently rejected the initial proposed increases from insurers, insisting they were too high given current inflation rates. This is the second time within months that the Federal Government has demanded that funds scale back their proposed hikes, particularly as healthcare inflation outpaces general inflation (4.8% vs 2.8%, according to the ABS).
The numbers that matter for the big 5
The five biggest health insurers – Medibank, Bupa, HCF, nib and HBF – together hold over 80% of the market share. And all but one have chosen to increase their premiums above the 3.73% industry average.
| Top 5 Health Fund | % Price Increase (2025) |
|---|---|
| Medibank | 3.99% |
| Bupa | 5.10% |
| HCF | 4.95% |
| NIB | 5.79% |
| HBF | 2.80% |
*Nib’s increase of 5.79% is the steepest among the large players – well above inflation.
Which health insurance companies went up the most in 2025?
The table below outlines the top 12 health insurers that increased their premiums the most in 2025.
| Health Insurance Company | Profit Type | 2025 |
|---|---|---|
| AIA | For profit | 5.70% |
| Australian Unity | For profit | 4.89% |
| Bupa | For profit | 5.10% |
| CBHS Corporate Health Pty Ltd | For profit | 3.90% |
| Doctors' Health Fund Pty Ltd | For profit | 3.48% |
| Hospitals Contribution Fund of Australia Ltd | Not for profit | 4.95% |
| Medibank | For profit | 3.99% |
| Mildura District Hospital Fund Ltd | Not for profit | 3.69% |
| NIB | For profit | 5.79% |
| Peoplecare Health Limited | Not for profit | 3.54% |
| Police Health Limited | Not for profit | 9.56% |
| Queensland Teachers' Union Health Fund Limited | Not for profit | 3.45% |
*The 2025 Industry Average is 3.73%
Which health insurance companies had the lowest rate rise in 2025?
The table below lists the top 12 health insurers with the lowest rate rises in 2025.
| Health Insurance Company | Profit Type | 2025 |
|---|---|---|
| CBHS Health Fund Limited | Not for profit | 2.84% |
| GMHBA | Not for profit | 2.44% |
| HBF | Not for profit | 2.80% |
| Health Care Insurance Ltd | Not for profit | 2.94% |
| Health Insurance Fund of Australia Limited | Not for profit | 1.91% |
| Hunter Health Insurance | Not for profit | 2.93% |
| Latrobe | Not for profit | 2.89% |
| National Health Benefits Australia Pty Ltd | For profit | 2.94% |
| Navy Health | Not for profit | 2.85% |
| Phoenix Health Fund Limited | Not for profit | 2.43% |
| St Luke's | Not for profit | 2.88% |
| Teachers Health | Not for profit | 2.94% |
Portability
Don’t re-serve waiting periods when you switch to a new health fund or policy
“John was immediately covered for a hip replacement in private hospital because he had already served his waiting periods for joint replacements on his old policy”
Not-for-profit vs for-profit funds: Who’s protecting their members better?
As with previous years, not-for-profit health funds are generally keeping their price increases lower than for-profit funds. This is because not-for-profits reinvest their surplus funds into better benefits, lower fees and more generous rebates for members – rather than paying out dividends to shareholders.
Most notably, HIF (Health Insurance Fund of Australia) will raise its premiums by just 1.91% – the lowest increase across all health funds in 2025.
What’s driving these increases?
It’s easy to blame inflation, but the real story is more complex. Several structural factors are compounding upward cost pressures for insurers:
- More complex (and expensive) surgeries: Australians are living longer and therefore needing more advanced treatments, from robotic surgeries to new cancer therapies.
- Rising demand for mental health services: Private mental health admissions have increased greatly, especially post-pandemic.
- Wages and staffing costs: Healthcare-workforce shortages are driving wage increases across both the public and private sectors.
- Chronic underfunding of public hospitals: As public waiting lists blow out, more Aussies have to turn to private care – which increases claim volumes for insurers.
Will some Australians pay hundreds more?
Yes – depending on your fund and level of cover, you could be hit with an annual increase of several hundred dollars. This especially applies to families on Gold-tier policies, where higher cover mean higher premiums.
That being said, the reported 3.73% average increase is just that – an average. Some funds and policies will rise by as little as 1.91%, while others (like Police Health) will go up by a whopping 9.56%.
Why downgrading your cover could backfire
Faced with the pain of higher premiums, it’s understandable that many Australians might be tempted to drop their extras cover or downgrade their hospital cover to Basic or Bronze tiers – or even cancel their policy outright. But this could be a risky move.
Government data shows that between December 2020 and December 20223, more than 400,000 Australians downgraded from Gold to lower tiers – leaving themselves potentially very underinsured if they need higher-cost surgeries like hip replacements or cancer treatments.
4 ways to take back control of health insurance costs in 2025
- Compare your options: Some funds consistently raise premiums less than others – especially not-for-profits.
- Tweak your policy to your actual needs: If you’re paying for pregnancy cover you no longer need, or for extras you never claim on, now’s the time to trim the fat.
- Try raising your excess: A higher excess can lower your premiums – but only if you’re financially comfortable covering that upfront cost if admitted to hospital.
- Look for perks when switching: Some funds might waive certain waiting periods, give you discounted premiums or bonus extras benefits for new members who switch before 1 April.
| Health Insurance Company | Profit Type | 2024 | 2025 |
|---|---|---|---|
| ACA | Not for profit | 3.18% | 3.16% |
| AIA | For profit | 2.19% | 5.70% |
| Australian Unity | For profit | 1.42% | 4.89% |
| Bupa | For profit | 3.61% | 5.10% |
| CBHS Corporate | For profit | 5.82% | 3.90% |
| CBHS Health Fund | Not for profit | 4.51% | 2.84% |
| CUA | For profit | - | - |
| Defence Health | Not for profit | 1.00% | 3.30% |
| Doctors' Health | For profit | 2.79% | 3.48% |
| GMHBA | Not for profit | 2.91% | 2.44% |
| HBF | Not for profit | 3.95% | 2.80% |
| Health Care Insurance Ltd | Not for profit | 0.27% | 2.94% |
| Health Insurance Fund of Australia | Not for profit | 3.87% | 1.91% |
| Health Partners Limited | Not for profit | 1.93% | 3.43% |
| health.com.au | For profit | - | - |
| Hospitals Contribution Fund of Australia | Not for profit | 2.89% | 4.95% |
| Hunter Health Insurance | Not for profit | 3.32% | 2.93% |
| Latrobe | Not for profit | 3.04% | 2.89% |
| Medibank | For profit | 3.31% | 3.99% |
| Mildura | Not for profit | 2.14% | 3.69% |
| National Health Benefits Australia | For profit | 3.41% | 2.94% |
| Navy Health | Not for profit | 3.10% | 2.85% |
| NIB | For profit | 4.10% | 5.79% |
| Nurses & Midwives | Not for profit | - | - |
| Peoplecare | Not for profit | 1.63% | 3.54% |
| Phoenix Health Fund Limited | Not for profit | 3.72% | 2.43% |
| Police Health Limited | Not for profit | 3.01% | 9.56% |
| Queensland Country Health Fund | For profit | 2.53% | - |
| Queensland Teachers' Union Health Fund | Not for profit | 1.96% | 3.45% |
| Railway & Transport | Not for profit | - | - |
| Reserve Bank Health Society | Not for profit | 2.97% | 3.17% |
| St Luke's | Not for profit | 3.20% | 2.88% |
| Teachers Health | Not for profit | 2.65% | 2.94% |
| Transport Health | For profit | 0.00% | - |
| Westfund Limited | Not for profit | 2.82% | 3.40% |
A year to review and reassess
2025’s health insurance price rise is yet another reminder that set-and-forget isn’t an option for health cover. With funds raising their prices unevenly – and the best deals hiding in smaller and not-for-profit funds – shopping around could save you hundreds.
The bottom line? Don’t just accept your renewal notice. Compare health insurance with Fair Health Care Alliance and find a policy that will give you the best value for money in 2025.
FAQ's
On 1 April 2025.
The average increase is 3.73%, but individual funds vary.
On average, yes. The not-for-profit funds tend to have smaller increases.
It’s smart to compare now to lock in lower prices before the new rates hit.
