“Keeping health insurance affordable is a priority for Australian Unity.” —Rebecca Harwood, CEO Insurances, Australian Unity.
Key points
- Private health fund premiums will change from April 1, 2025, as part of the annual review by the Department of Health.
- Australian Unity remains committed to keeping premiums as low as possible, and while increases are never welcomed, they are necessary to keep pace with the rising cost of healthcare and treatment.
- Talk to Australian Unity if you want to find ways of reducing the impact of the rate review. This include conducting a Right Cover Check, or locking in the 2024 rates by paying a full year in advance by March 31.
Sadly, it’s a fact of life that prices rise every year, and it’s no different with health insurance. Australian Unity remains committed to keeping premiums as low as possible, and while increases are never welcomed, they are necessary to keep pace with the rising cost of healthcare and treatment.
For any health fund, adjusting premiums is necessary to manage escalating costs associated with the healthcare sector. Contributing factors include heightened hospital expenses, increased charges from healthcare providers, the growing cost of medical equipment, an increased number of claims, more complex and costly procedures and, more recently, the impact of inflation.
On 1 April 2025, following the annual premium price review, it is possible that the cost of your health insurance will increase. This change allows Australian Unity to meet the increased cost of healthcare services, caused by Australia’s ageing population and rise in chronic conditions. This increase will ensure our health fund remains sustainable, allowing us to continue to meet the healthcare needs of our members.
According to Rebecca Harwood, Australian Unity's Chief Executive Officer of Private Health Insurance, the increase is necessary to address growing healthcare expenses and rising claims while maintaining the long-term sustainability of the health fund.
“We understand the financial pressures facing many Australians, and our goal is to keep premiums as affordable as possible while ensuring members receive access to the care they need,” Rebecca says.
“Premium adjustments are always a careful balancing act.
“We aim to maintain affordability for our members while responding to the realities of healthcare costs. This ensures Australian Unity can continue to meet the needs of our members now and into the future.”
Why do premiums change each year?
Health funds review their premiums annually, ensuring they keep pace with the rising cost of healthcare. Every year the Department of Health and Aged Care and the Australian Prudential Regulation Authority (APRA) assess premium increase applications from health funds, considering the merits, relevant data and expert opinion to ensure changes are fair and justified. All decisions require final approval from the Federal Minister for Health and Aged Care.
These annual applications and changes are necessary to ensure the sustainability of Australian Unity's private health insurance and the industry as a whole.
The good news is that the financial incentives associated with private health insurance—receiving the Australian Government Private Health Insurance Rebate and avoiding the Medicare Levy Surcharge (MLS) and Lifetime Health Cover loading—still remain.
If you don’t hold private health insurance and you earn over $97,000 (for singles) or $194,000 (couples and families), then you may be required to pay the MLS at tax time. This amounts to between 1 percent and 1.5 percent of your income.
The Lifetime Health Cover loading is a policy introduced by the government to encourage people to take out private hospital insurance at a younger age and maintain it over time. Once you turn 31, you have until the following 1 July to buy private hospital cover. Failure to do so exposes you to extra loading fees. For every year you delay, you may have to pay an additional 2 percent (up to a maximum of 70 percent) on top of the cost of your private hospital cover.
“A lot of government incentives are put in place to drive behaviour that will keep the system sustainable,” says Rebecca.
“You could theoretically just pay the tax, or you could actually derive some value from that tax by purchasing private health insurance.”
A reflection of the wider economy
According to Private Healthcare Australia, a record 15 million Australians have health insurance and rely on it for timely access to hospital care, and allied health services in the community.
Private Healthcare Australia CEO, Dr Rachel David, says the premium increase is necessary for health funds to meet the rising cost of healthcare and ensure private hospitals and other providers were adequately funded.
“Every premium increase is carefully calculated and regulated. We know people with health insurance are impacted by cost-of-living pressures, so health funds are doing everything possible to ensure health insurance remains affordable and accessible for Australians,” Dr David says.
"To remain viable, funds have to charge more because inflation is driving up the cost of everything health insurers pay for.
“We also need to ensure hospitals are adequately funded so they can manage the significant challenges they have experienced due to the pandemic, and the subsequent inflationary economy.”
Ways to reduce the impact on your hip-pocket
With health insurance premiums likely to increase across the sector, how can you reduce the impact on your household budget?
Rebecca recommends talking to Australian Unity’s customer service team to find ways of reducing the impact of the rate review.
“A regular policy review is a good way of making sure you’re paying for what suits you and your family,” suggests Rebecca. “If you’ve held the same policy for a long time, you may be paying for services you no longer need, or missing inclusions you could find beneficial.”
Your options include:
- Conducting a Right Cover Check, where you and a consultant analyse your life stages, healthcare needs and the appropriate policy options available.
- Paying the full year in advance, effectively locking in your 2024 rate for a further 12-months.
Australian Unity is proud of its commitment to the wellbeing of Australians—over 180 years—and this history of providing affordable health insurance to members will continue into the future.
“Australian Unity compares favourably to other health funds in terms of premiums,” Rebecca says.
“We are committed to working closely with our members to address any concerns they may have, so it’s important for our members to reach out to our dedicated customer service representatives if they have cost of living pressures, or if they have any questions regarding a change to their premium.”
Want to discuss your health cover, or to lock in your current rate?
You can talk to our dedicated support team to discuss your health insurance needs and explore tailored solutions that provide value and peace of mind.
