At a time when household budgets are already at a boiling point, one of the biggest silent money drainers could be sitting in your direct debits: your health insurance premium.
Loyalty isn’t rewarded, but how much does it really cost?
It might feel easier to stick with what you know, but the numbers tell a different story.
Australians who’ve held the same health insurance policy for more than a decade are paying an average of $306 per month, compared to around $237 for those who switched recently, according to Compare the Market’s recent Household Budget Barometer.
That’s a difference of more than $800 a year, on average, compared to recent switchers.
Paying too much for health insurance?
Step 1: Select your current health fund below.
The funds displayed are for the top 10 largest health funds by market share in Australia as of April 2026.
Step 2: Compare from a range of funds when you answer a few basic questions.
The quiet price creep hitting millions
While health insurance premiums usually jump every year on 1 April, it’s not necessarily an expense you’ll notice as much as the weekly grocery shop or quarterly energy bill. But over time, those increases add up to something far more noticeable.
In April alone, premiums rose by an industry average of 4.41%. On paper, it might not sound like a lot, but for someone spending $3,560 on an average combined policy, a 5% increase is an extra $178 a year.
Potential health premium adjustments for 2026
| Policy type | Average | +2% | +3% | +4% | =5% |
| Hospital policy | $2,641 | +$52.80 | +79.20 | +$105.60 | +$132 |
| Extras policy | $830 | +$16.60 | +$24.90 | +$33.20 | +$41.50 |
| Hospital and extras combined | $3,560 | +$71.20 | +$106.80 | +$142 | +$178 |
*Averages based on policies purchased via Compare the Market between January and November 2025. Figures include rebates and age-based discounts as well as lifetime health cover loading where applicable.
If you’ve remained loyal to your health insurer for many years, it’s quite a whack to the hip pocket.
Choose your type of cover to see if you could be saving
Why doing nothing could be your most expensive mistake
Health insurance often becomes something people “set and forget”, but here’s why that can be a costly mistake. Sticking with the same policy year after year could mean gradually drifting away from better value in the market.
Health funds:
- waived extras waiting periods
- weeks free of cover
- Gift cards
- cashback offers
Meanwhile, existing customers are often exempt from these offers, all while being hit with higher premiums every year.
Are you paying for things you’ll never use?
Another costly mistake is holding cover that no longer matches your life.
For many Australians, particularly those over 50, higher-tier policies can include services that are no longer relevant, like pregnancy-related care.
That means you could be paying for coverage that you’ll never claim on, simply because you haven’t reviewed your policy in a while.
Even small differences compound over time. A fund increasing premiums by a percent more than another insurer could mean the difference of hundreds of dollars extra over a decade.
And with loyalty often coming at a cost, many Australians may be paying more simply because they haven’t reviewed their cover recently.
Should you cut back or cut out?
Scrapping health insurance altogether isn’t always the best move if pricey premiums are pushing your budget to the limit.
Private cover can still help reduce wait times for treatment and give you more choice when it comes to care.
But that doesn’t mean you need to pay top-tier prices. You may be able to switch to a lower level of cover with a smaller price tag that covers all the things you need. And, if the thought of re-sitting waiting periods is a barrier, it shouldn’t be. Switching to an equal or lower level of cover means you don’t need to sit the waiting periods you’ve already served. It just means similar cover at a smaller cost.
A smarter way to save
Instead of cancelling your cover, a better approach is to reshape it around what you actually need.
Simple changes that can make a big difference include:
- switching to a lower level of cover
- increasing your excess
- dropping unused extras.
In some cases, adjusting your policy can lead to significant savings.
Compare the Market helped one family reduced their annual premium by $3,750 simply by reassessing their cover and switching to a more suitable option.*
The bottom line
Letting your health insurance renew in the background could be costing you hundreds — if not thousands — over time.
Taking a few minutes to review your policy might be one of the easiest ways to ease pressure on your household budget.
Review your health insurance regularly
It takes less than 2 minutes. Free to us and no obligation to change.
**Disclaimer: Premium Reduction based on family living in Qld, switched on 31/3/26. Silver Plus hospital with Extras. Includes Base Tier Australian Government rebate with no Life time Health Cover loading. Premium reduction based on lowering hospital cover from Gold to Silver Plus, increasing the excess and changing extras to a policy better suited to their needs, and may change with future rate rises.
