This article provides general information only and does not constitute personal financial advice. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on any information in this article, you should consider whether it is appropriate for you and seek advice from a licensed financial adviser if necessary.

Every year on 1 April, private health insurance premiums increase across Australia. For most policyholders, this means paying more for the same level of cover. Reviewing your policy now, before the new premium round takes effect, gives you time to compare alternatives, adjust your cover, or switch funds without penalty.

Why the April deadline matters

Private health insurers submit their proposed premium increases to the Australian Government for approval, typically announcing the new rates in February or March. According to the Australian Government Department of Health and Aged Care, these increases apply uniformly on 1 April each year (Private Health Insurance, 2026).

If you switch funds or policies before 1 April, you lock in the current (lower) premium rate with your new insurer. If you wait until after the increase takes effect, you pay the higher rate immediately.

The standard 30-day cooling-off period still applies when you take out a new policy, so you can cancel within 30 days and receive a full refund if you change your mind.

What to check during your review

Start by confirming what your current policy actually covers. Many Australians pay for hospital cover they rarely use, or extras cover that does not match their needs. Check your policy documents or log in to your insurer’s member portal to see:

  • Hospital cover exclusions: Does your policy exclude common procedures such as joint replacements, pregnancy, or mental health treatment? If you are likely to need these services, you may be paying for inadequate cover.
  • Excess and co-payments: A higher excess reduces your premium but increases your out-of-pocket cost if you claim. Consider whether the current excess level still suits your financial situation.
  • Extras cover usage: Review the past 12 months of claims. If you paid $1,200 in extras premiums but only claimed $400 in dental and physio, you are losing money. Drop or downgrade extras that you do not use.
  • Waiting periods already served: If you have held your current policy for 12 months or more, you have served the standard waiting periods (2 months for psychiatric, rehabilitation and palate services; 12 months for pre-existing conditions and pregnancy). Switching to a comparable policy with another fund means you do not re-serve these waiting periods, provided there is no gap in cover.

Tax implications: the Medicare Levy Surcharge

Single taxpayers earning more than $97,000 (or families earning more than $194,000, for the 2026-27 income year) must pay the Medicare Levy Surcharge (MLS) unless they hold an appropriate level of private hospital cover. The surcharge ranges from 1% to 1.5% of your taxable income, which for many people costs more than a basic hospital policy.

If you currently hold hospital cover solely to avoid the MLS, ensure your policy meets the Australian Government’s minimum requirements. A policy with an excess above $750 for singles (or $1,500 for families) does not satisfy the MLS exemption criteria, according to the Australian Taxation Office (ATO, 2026).

Lifetime Health Cover and age-based rebates

Lifetime Health Cover (LHC) loading applies if you take out hospital cover after turning 31. For every year over age 30 that you delay, a 2% loading is added to your premium (up to a maximum of 70%). This loading remains for 10 continuous years of hospital cover. If you already have LHC loading, switching funds does not reset it, provided you maintain continuous cover.

Read also: Comparing Health Insurance Policies in Australia: Hospital Versus Extras Cover

The Australian Government private health insurance rebate reduces your premium based on your age and income. Rebate tiers adjust on 1 July each year. If your income or age has changed since you last reviewed your policy, your rebate percentage may have changed as well. Check your current rebate entitlement at ato.gov.au or ask your insurer to confirm the rate applied to your premiums.

How to compare policies

Use the Australian Government’s official comparison tool at privatehealth.gov.au to compare policies across all registered insurers. The tool allows you to filter by cover type, excess, and specific treatments, and displays the annual premium cost after applying your rebate.

When comparing, focus on:

  • Comparable cover: Ensure the alternative policy covers the same treatments as your current policy (or better). Switching to a cheaper policy that excludes services you need is a false saving.
  • Network hospitals: Some policies restrict you to a network of preferred hospitals. Check that the alternative policy provides access to hospitals in your area.
  • Premium increase history: Canstar and other comparison sites publish historical premium increase data by insurer (Canstar, 2026). Funds with consistently lower annual increases may save you more over time, even if their current premium is slightly higher.

When to switch

If you find a better policy, contact the new insurer before 1 April to arrange the start date of your new cover. You must maintain continuous cover (no gap between cancelling your old policy and starting the new one) to avoid re-serving waiting periods or losing your LHC loading.

Most funds process new applications within a few business days. Allow at least one week before 1 April to ensure your new policy is active in time.

If you are satisfied with your current cover and premium, no action is required. Your insurer will notify you in writing of the new premium rate, and it will apply automatically from 1 April.

Reviewing your private health insurance annually, particularly before the April premium round, ensures you are not overpaying for cover that no longer suits your needs. Compare policies now while you still have time to switch at the lower rate.