How you can avoid rising health insurance premiums

That is because Federal Health Minister Mark Butler approved premium increases to go into effect on April 1.

And while the government and insurers want all Australians to have insurance, experts say it is not worth it for everyone.

Health insurance premiums are only allowed to increase once a year, on April 1.

Insurers must get permission from the federal health minister before hiking up prices.

Insurers will charge 3 per cent more on average, Mr Butler said.

This means the average premium will cost $200 a year more, CHOICE health insurance expert Uta Mihm said.

"It's very different depending on what level of cover you are on and also which fund you are with," she said.

Three quarters of Australians with private health insurance use the four biggest insurers - Medibank (including AHM), Bupa, HCF and NIB, according to CHOICE.

"[They] actually have increased their premiums, on average, more than the industry average," Ms Mihm said.

CBHS Corporate Health is hiking up prices the most, with members to pay 5.8 per cent more.

Meanwhile CUA Health Limited, health.com.au, Nurses & Midwives Health, Railway & Transport Health Fund and Transport Health are not increasing premiums.

Mr Butler - who approved the increases - said this increase was below the annual rise in wages, social security payments and inflation.

The average increase for 2024 is lower than in previous decades.

Health insurance premiums have risen by 4.85 per cent on average each year for the past 28.

There are two types of health insurance - hospital cover and extras.

Hospital covers costs while in hospital, and extras reimburse general procedures like dental, acupuncture and optical.

If you earn more than $93,000 as an individual or more than $186,000 as a family, you will be charged a Medicare levy surcharge.

This ranges from 1 to 1.5 per cent.

"As soon as you're over that income level, you would really want to have hospital insurance," Ms Mihm said.

"Because if you take the cheapest policy, it's actually cheaper than the extra tax you would have to pay."

People aged 55 or younger rarely need hospital insurance, retired University of Canberra public finance lecturer Ian McAuley said.

"[Generally] people under 55 pay more than they get back - much more than they get back. People over 55 get back more than they pay," he said.

"[Insurers] try to get younger people to pay more and more to subsidise older people.

"I'm rather shocked to see that in spite of all our cost-of-living problems, younger people are still heavy users of private health insurance."

Extras insurance is "basically like a book of discount vouchers", Ms Mihm said.

She recommended people honestly consider how often they will use those extras.

"Do you have one massage a year, or do you go regularly for massages and regularly for physiotherapy? Do you actually have glasses?" she said.

"A lot of people have extras who shouldn't have extras because they pay more than they get out."

ACT/NSW residents also pay more for health insurance than those in many other states, Ms Mihm said.

This is because premiums get higher in states or territories with more claims.

In the ACT, only 74.2 per cent of claims had no gap fees, according to Australian Prudential Regulation Authority (APRA) data.

This is much lower than the national average of 87.5 per cent.

People who plan to have elective surgeries can benefit from shorter waiting times in the private hospital system.

They may also want to choose their own specialist.

Elective public surgery waiting times were the highest in 20 years in the 2022-23 financial year.

However, there may be waiting periods before you can claim on procedures and out-of-pocket fees.

Hospital cover out-of-pocket costs increased by 10 per cent from December 2022 to 2023, according to APRA data.

Patients paid $411 per hospital visit, on average, in 2023.

There are four tiers in private cover - basic, bronze, silver and gold.

There are minimum requirements for coverage under each tier.

Make sure you only have the cover you need, and shop around for the cheapest option, Ms Mihm said.

This means comparing insurers, not just downgrading with your existing insurer.

The difference between the most expensive and cheapest gold cover policy in the ACT is $3000 a year, Ms Mihm said.

Most people can continue to be covered by their parent/s' private health insurance until the age of 30, Ms Mihm said.

This could be free for students, or cheaper for non-students than if they were on an individual plan.

The definition of a student may vary between funds, and could include an apprentice or intern.

"[Families] should really consider whether a young person [really] does need health insurance and needs the same level of health insurance [as] their parents," Ms Mihm said.

Some insurers will offer a discount for people aged under 30, which is worth shopping around for.

Australians are penalised if they don't have continuous hospital cover from the age of 31.

You are charged a 2 per cent lifetime health cover loading on top of your premium each year over the age of 30, with a maximum of 70 per cent.

The loading no longer applies after 10 years continuous cover.

However, experts say it does not mean young people aged over 30 should take out private health insurance.

CHOICE recommends young people who do not need hospital cover for chronic or planned surgeries do not take it out until they need it - despite the loading.

"If you put off buying health insurance until you really need it, and be smart about the policies you buy, the LHC loading will be less than what you would have spent to avoid it," they said.

Online comparison tools can have conflicts of interest, Monash University business school's Graeme Samuel said.

Many get a commission or kickback when someone clicks and signs up to an insurer.

They may not include all available policies and some are even owned by big insurance companies.

Dr Samuel reviewed the private health system in 2016.

"There were a number of significant insurers that were not being compared or analysed [on those sites]," he said.

The government has a private health policy compare tool.

Ms Mihm recommends using CHOICE tools, including the 'Do I need health insurance quiz' (which is free) and the policy compare tool (which requires a membership).