Every year from November, all health insurers in Australia must submit their proposed premium increases to the Australian Government for review. A process of expectation setting, review and resubmission occurs until the Government approves the average premium increases, which are then implemented on 1 April of the following year.
The Government collaborates with underwriters to strike a balance between sustainable premium increases for the consumer and ensuring the long-term viability of health insurance products and coverage for its members.
Effective 1 April 2026, the Australian Government1 has approved an average premium increase of 4.41% across all health funds and products.
Setting your expectations
It's important to understand that the headline percentage announced by the Government is a simple average across all policies offered by all insurers in the market. As a result, this figure often does not reflect the actual premium increases experienced by corporate health plans or even by many Australians with retail private health insurance.
Why are my premium increases different from the Government average?
There are over 30 registered health insurers in Australia and premium increases will vary significantly depending on factors such as:
- The health insurer: Pricing varies across insurers, particularly when you consider that many of them are 'Restricted' health funds only offering coverage to certain target regions, groups or unions.
- Corporate vs retail plans: Corporate health plans often have different pricing structures compared to retail policies, as they offer different benefits often not accessible by retail offerings.
- State and product tiers: Premium increases can differ across states and between product tiers. Comprehensive Silver Plus and Gold Hospital cover typically experience higher increases compared to basic covers.
- Claims utilisation: Corporate health plan renewal terms are influenced by claims utilisation and underwriting performance within individual corporate health pools.
It's essential to review the specific premium increases provided by your insurer or broker, rather than relying solely on the Government's average percentage increase. This will give you a clearer understanding of how costs are changing for your business.
Consider the details of your policy, not just the percentage increase
Subsidised corporate health plans often deliver significantly higher value benefits and preferential premiums compared to retail products. These plans provide employees and their families with affordable access to top-tier benefits, such as a higher level of hospital cover and comprehensive extras. It is often difficult to match the same level of coverages for the premiums employees pay in a retail environment, making corporate health plans a valued component of employee remuneration in an increasingly complex and expensive health insurance landscape.
What contributes to premium increases?
Premium increases are necessary to ensure the sustainability of health insurance products. Key drivers for increases in costs include advancements in medical technology, rising pharmaceutical costs, increased utilisation and an ageing population.
These factors particularly impact comprehensive covers, which provide access to high-cost procedures that are often excluded in basic retail products.
How do health insurance premiums in Australia compare internationally?
Australia's health insurance premium increases remain moderate compared to international markets, where median 2025 renewals were 18% in the United States and as high as 25% in the United Kingdom and Singapore. This reflects Australia's robust regulatory framework, which ensures a balance between affordability for policyholders and sustainability for insurers.
However, the health insurance sector in Australia continues to face challenges, including rising medical costs, inflation and regulatory developments. These pressures are reflected in the Consumer Price Index (CPI)2 for hospital and medical services, as reported by the Australian Bureau of Statistics.
Additionally, a recent Bill3 introduced to Parliament may bring further changes to the industry. Proposed reforms include mandatory publication of medical fees, out-of-pocket costs and insurer data via the Medical Costs Finder, which will increase transparency around costs and value. If passed, the Bill will also strengthen oversight of new products and product changes. While the timing and outcome of these reforms remain uncertain, they could influence future pricing and product design across the sector.
What's next?
You should receive specific plan rates from your insurer before 1 April. If you're working with a broker or health insurance expert, they can assist you in managing rebate changes and understanding the impact on your business.
Why choose Gallagher
With over 50% of Australians holding private health insurance4, it's a significant component of most working families' budgets. Offering a corporate health plan is an excellent opportunity to provide your employees with a valued benefit.
Gallagher is a trusted expert in health insurance, with over 35 years of experience helping organisations find corporate health plans that align with their business goals and budgets. If you don't currently offer a health plan, connect with our team to explore tailored solutions that help your employees and their families access top-tier benefits.