Health cover premium changes

Each year, along with all other Australian health funds, we review our premiums to make sure they're keeping pace with the escalating costs and complexity of delivering healthcare services.

As a not-for-profit health fund, we do everything possible to ensure our members’ money is being used wisely to keep premium and healthcare costs as low as possible while supporting a strong private and public healthcare system.

Annual health premium adjustments are necessary to ensure we have adequate capital and income to cover what we expect to fund in the next 12 months.

Factors influencing premium changes can include:

• increasing cost of delivering medical and hospital services (including surgical equipment and prosthetics)
• increased out-of-cycle funding for private hospital operators to cover improved wages for nurses and medical staff
• ageing population, requiring greater health intervention for more complex chronic conditions including mental health, weight loss, cancers and joint replacements
• health funds are paying more for essential services such as cyber security and IT services to support member claims and payments.

Health insurance continues to provide more value for consumers than some other types of insurance. For every premium dollar paid, HCF returned 89 cents in benefits on average to our members over the last 10 years^*. For general insurance, such as home and contents and car insurance, the return is 65 cents in the premium dollar⁺⁺.

No, absolutely not. As a not-for-profit, we're driven by a guiding principal: putting members first. We don’t have shareholders and we don’t pay dividends. Every dollar we reinvest is about delivering more value for our members.

At HCF, we work closely with our partners, providers, industry groups, government and regulators to ensure we remain focused on maximising affordability and value for our members.

• For every premium dollar, we’ve paid out more benefits to members than the industry average over the past decade^*.
• We paid over $3.6 billion for members’ hospital episodes and extras services last financial year in the 2024-25 financial year.
• We partner with providers to deliver innovative care models such as our No-Gap Joints and No-Gap Day Surgery programs.
• We've increased our range of member benefits and preventative health programs.
• We continue to enhance our member services and support.
• We ensure we have sufficient capital to pay members’ claims and support a strong dual healthcare system.

Our not-for-profit status ensures any surplus goes straight back into the fund for the benefit of members – not shareholders.

Why is my premium increase different to the national average?

The Australian Government calculates the national average based on the premium increases it approves for each Australian health fund.

Your premium increase may be different to the national average percentage (or HCF average percentage) because it relates to your chosen level of HCF cover. Your premium increase reflects the balance between managing member payments against the claims we pay out for all members on your level of cover in your state or territory.

We do this to make sure our products remain sustainable and continue to offer members value-for-money.

Private health insurance in Australia is community-rated rather than risk-rated. This means you pay the same premium for the same level of cover as everyone else in your state, regardless of your age, health status, fitness or the number of claims you make. This helps make private health insurance more accessible for everyone.

Premiums increase to cover the rising costs of healthcare and to make sure we have sufficient reserves to cover the benefits for our members over the coming year. This increase is the balance between the premiums we receive from members on your level of cover, versus the claims we expect to pay out to members on the same level of cover.

HCF is a true not-for-profit health fund, with one of the highest benefit payout per premium dollar ratios among the major funds. We retain low amounts of capital to operate our business so we can give as much back to members as possible.

Eligible Australians with private health insurance currently receive a Rebate from the Australian Government to help cover the cost of their premiums. The Rebate amount is the government’s contribution toward your private health cover and is calculated based on your income, age and family status. It’s adjusted annually based on the Consumer Price Index (CPI) and the average premium increase across all health funds.

The Rebate will also change if your income has changed (and will not apply if your income is above a certain threshold). Your premium might also be different if you’ve made changes to your cover, or if you’ve added or removed people from your policy.

On 1 July 2025, the Australian Government Rebate income tiers changed. If you need to update your tier, please contact us.

Read more about the Australian Government Rebate

Lifetime Health Cover (LHC) loading is a government initiative created to encourage Aussies to take out and maintain private hospital cover earlier and ease the load on the public healthcare system.  

This isn’t relevant if you’ve chosen extras only or ambulance only cover. 

If you take out hospital cover before you’re 31 and maintain it, you’ll enjoy paying your premium without any LHC loading. You just need to take out hospital insurance with an Australian registered health fund by 1 July following your 31^st birthday and maintain it.  

For each year you wait after the age of 31, you’ll pay an extra 2% per year for your cover (up to 70%). If you get hospital cover sometime after the age of 31, and you maintain it for 10 years, the loading will be removed.

Read more about Lifetime Health Cover