Analysis: Average wage increases vs health insurance premium hikes

Richard Laycock 30 March 2016

Average wage increases can't keep pace with rising health insurance costs.

Stressed Student

With the annual health insurance rate hike only a day away, consumers are scrambling to switch health funds and lock in a lower rate. This is a task that may be more important than ever.

Each quarter the Australian Bureau of Statistics (ABS) releases its seasonally adjusted Wage Price Index (WPI). The December 2015 quarter ended on a low-note, with growth at a paltry 0.5%. The 2015 calendar year culminated with year-on-year growth at a mere 2.2%, a record low since the series was first published in 1998. Wage growth has been on a continued downward trajectory since 2012.

Why is this relevant?

As wage growth has declined, health insurance premiums have continued to rise. The Australian Government Department of Health has been tracking the rises in health insurance premiums since 2010. In that time, the average wage has only increased by 3% per year. In the same time span health insurance premiums have increased on 5.73% per year.

The most recent industry weighted premium increase of 5.59% is over two-and-a-half times that of 2.2% wage growth.

Speak with an adviser and get a health insurance quote

Picture: Shutterstock

Compare health insurance on

Ask a Question

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the privacy policy, receive follow up emails related to and to create a user account where further replies to your questions will be sent.

Ask a question