Why health insurancepremiums go up

As a not-for-profit health fund, our focus is on delivering value to members rather than shareholder profits and we do everything we can to keep the cost of your cover as low as possible.

The increasing cost of health care means that all Australian health funds review their premiums each year – including us. We’re proud of the fact that in 2019, our average increase was our lowest in 17 years and below the industry average.

That said, we know that rising costs aren’t what you want to hear, so we want to ensure you understand why it happens and what we’re doing to help make health care as affordable as possible for our members.


Advances in health care have led to an improvement in medical treatment, but this means that the services you can access may cost more.

The reality is that health services are getting more expensive and are being used by more people. More money is being spent on health across the sector with total health expenditure in Australia increasing by 57% in the last decade.

We’re also now paying out over 50% more (on average) per policy compared to 10 years ago.


Our world-class health care system is one of the reasons Australians are now living longer, but our longer lifespans are creating greater demand for medical treatment.

For the last financial year, 2017-2018, 3 of the most common hospital treatments we covered were:

  • knee replacement – around 3,900 members had this procedure
  • hip replacement – around 3,000 members had this procedure
  • cataract surgery – around 26,000 members had this procedure.

We also support our younger members – we paid over $144 million in hospital benefits to under 30s last financial year.

It all adds up to more people using health services. Last year the number of HCF members admitted to hospital rose by 11%.


The Australian Government rebate on private health insurance was introduced in 1999 to help make health insurance more affordable. This contribution from the government helps to cover some of the cost for eligible Australians. 

In 2012, the rebate became means tested, which means your eligibility depends on your income. If you have a higher income, your rebate may be reduced, or you may not be entitled to a rebate at all.

The rebate amounts are also adjusted annually on 1 April – this is commonly known as 'rebate indexation'. It's based on the consumer price index (CPI) and the industry average premium increase.

Rather than the government paying 30% of a member’s premium in 2013, the government will pay 25.1% of the premium from 1 April 2019. This reduction in the rebate means members have to pay a higher share of their premiums.

Visit the Department of Health or privatehealth.gov.au for more information.


As a not-for-profit health fund, we’re focused on making sure our members can access affordable health care. We pass on savings wherever we can, look for ways to reduce the cost of treatment and help them get the best value from their cover. To ensure they face reduced or limited out-of-pocket expenses for services covered under their policies, we have agreements in place with 450 of the 600 private hospitals in Australia (known as participating hospitals).

And last year, over 95% of members’ specialist inpatient services were covered by our Medicover scheme – where members pay their specialist doctor(s) either no-gap or known-gap (an out-of-pocket amount capped at $500).


We look at the big picture and leverage our resources, networks and influence to innovate and help make health care more affordable for all Australians. Here are some of the ways we do this:

  • HCF Research Foundation: investing in the improvement of health services.
  • Driving reform: working directly with the government to influence reform to lower healthcare costs.
  • HCF Catalyst: supporting health tech start-up businesses to drive innovation with the aim of creating more effective and efficient health care. 
  • Healthshare: we are the first health fund to partner with Healthshare to help you and your GP find a specialist that will charge no gap or a known gap.

We're also working on improving our IT infrastructure and member systems to reduce our long term operating costs.


For the third year in a row, we’ve been recognised by independent review body Canstar, for providing outstanding value in health insurance.

We’re also proud to have been recognised as Australia’s most trusted private health insurer by Roy Morgan Net Trust Survey 2018.

Find out more

Frequently asked questions

Read FAQs on your premium changes.

Understanding the costs

How to get the most out of your private health insurance.


What you need to know about the private system.


Programs and services that empower you to live a healthier life.