Private health insurance premiums in Australia are set to increase by 3.73% starting 1 April 2025, following government approval after a thorough review of insurer proposals.
The decision marks the culmination of a process in which insurers were required to resubmit their claims three times. The Australian Government, citing the private health insurance industry’s record profits, pushed for a lower increase. Health Minister Mark Butler emphasized that the government’s scrutiny of insurer submissions was aimed at ensuring a fair outcome for policyholders.
This approved increase is notably smaller than the 6.20% rise implemented by former Health Minister Peter Dutton in 2014, which remains the largest premium hike in two decades. The government also pointed to Dutton’s decision to freeze income tiers for private health insurance in 2014, which led to higher taxes and reduced rebates for policyholders until indexation resumed in July 2023.
Approximately 15 million Australians currently hold private health insurance, contributing to an estimated total premium value of A$29.9 billion for the year ending 30 September 2024. For 2025, the government will allocate A$7.6 billion in rebates to policyholders.
The premium rise comes amid ongoing concerns over the affordability of health insurance in the country.
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