Health insurance premium going up by 5.59% for 2016

Richard Laycock 2 March 2016

Respite for consumers as April private health insurance increases hit four-year low.

March 31 Health

Australian consumers can breathe a sigh of relief as health insurance premiums are only set to rise by an average of 5.59% in 2016.

After some back-and-forth between Minister for Health Sussan Ley and private health insurers, premium prices will rise by the lowest level in the last four years, 10% less than the previous years' increase.

Minister Ley confirmed that after she requested insurers reconsider their premium increases, 20 health funds resubmitted a lower premium increase, meaning lower-than-expected price rises for over 93% of Australians with private health insurance.

As a result of the resubmission request, Australian families with combined hospital and general health cover save roughly $166 per year compared with what they would have been paying if the increases went ahead as originally planned.

Ley's hope is that these lower-than-average premium increases encourage more competition between funds, and make it easier for consumers to shop around and compare their options in order to find the best deal.

How much are Australian insurers raising their premiums in 2016?

The table below shows the 2016 health insurance premium increase and compares them with the previous year.

InsurerAverage increase with rate protectionYoY Change
20162015
ACA Health Benefits Fund
6.19%4.96%25%
Australian Unity Health Limited5.05%6.26%-19%
Bupa Australia Pty Ltd5.69%5.59%2%
CBHS Health Fund Limited5.92%6.58%-10%
CDH Benefits Fund6.19%6.99%-11%
CUA Health Limited8.95%6.35%41%
Defence Health Limited5.48%5.62%-2%
Doctors Health Fund3.76%3.98%-6%
GMHBA Limited5.44%6.43%-15%
Grand United Corporate Health4.26%4.32%-1%
HBF Health Limited4.94%5.96%-17%
Health Care Insurance Limited6.90%6.12%13%
Health Insurance Fund of Australia Limited6.55%5.31%23%
Health Partners Ltd7.14%4.49%59%
health.com.au8.81%5.76%53%
HCF5.42%6.57%-18%
Latrobe Health Services5.52%6.15%-10%
Lysaght Peoplecare Ltd4.38%6.08%-28%
Medibank Private Limited5.64%6.59%-14%
Mildura Health Fund6.74%6.14%10%
National Health Benefits Australia Pty Ltd (onemedifund)5.28%6.26%-16%
Navy Health Ltd5.50%4.50%22%
NIB Health Funds Ltd.5.55%6.55%-15%
Phoenix Health Fund Limited5.72%6.48%-12%
Police Health4.81%4.48%7%
Queensland Country Health Fund Ltd4.91%4.77%3%
Queensland Teachers' Union Health Fund Ltd7.15%6.36%12%
Railway and Transport Health Fund Limited5.61%6.17%-9%
Reserve Bank Health Society Ltd5.37%4.88%10%
St.LukesHealth5.89%6.27%-6%
Teachers Health Fund4.97%6.86%-28%
Transport Health Pty Ltd6.49%4.84%34%
Westfund Limited5.94%7.92%-25%
Industry weighted average 5.59%6.18%

Biggest winners

Which insurers had the lowest health insurance premium increase?

InsurerAverage increase with rate protectionYoY Change
20162015
Lysaght Peoplecare Ltd4.38%6.08%-28%
Teachers Health Fund4.97%6.86%-28%
Westfund Limited5.94%7.92%-25%
Australian Unity Health Limited5.05%6.26%-19%
HBF Health Limited4.94%5.96%-17%

Biggest losers

Which insurers had the highest health insurance premium increase?

InsurerAverage increase with rate protectionYoY Change
20162015
Health Partners Ltd7.14%4.49%59%
health.com.au8.81%5.76%53%
CUA Health Limited8.95%6.35%41%
Transport Health Pty Ltd6.49%4.84%34%
ACA Health Benefits Fund6.19%4.96%25%

Why do health insurance premiums increase?

Generally, health insurance premium increases reflect insurers project their costs will be over the coming year. These increases take into account situations such as:

  • Increased medical treatment and service costs
  • An ageing population
  • Remaining viable in the long term

Today's lower than average increases may be an indication of good things to come for consumers, as insurers are displaying signs that they are open to a sensible reform process and lowering premiums long-term.

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