Navigating the 2026 Health Insurance Hikes

Insurance is meant to protect your finances from large, unexpected costs, but the premiums themselves can strain a budget. This article explains how private health insurance premium rises are approved each year, what you can check at renewal, how the Medicare Levy Surcharge (MLS) fits in, and what Moneysmart advises about comparing home, contents and car insurance. It is general information as at 23 October 2026, not personal advice.

How Health Premium Increases Work

Private health insurers apply to the Minister for Health once a year in the annual premium round. The Minister must approve an application unless satisfied the increase is not in the public interest, and approved increases take effect on 1 April each year (Department of Health).

For 2026, the Government approved an industry average increase of 4.41% from 1 April, compared with 3.73% the year before. The Minister's release says each insurer's average change is published on health.gov.au, and that insurers must explain the reasons for changes and your options (Minister for Health).

The average hides differences between funds and between policies. As a hypothetical, a policy costing $2,400 a year would rise by about $106 at exactly the average, but your own increase is shown on your renewal notice. Insurers must give notice early enough for you to review your cover and consider switching.

What You Can Check at Renewal

Compare policies

The Commonwealth Ombudsman runs PrivateHealth.gov.au, which describes itself as independent information and lets you compare policies and insurers. The Minister's release encourages people to review their needs and use it to compare products and prices from all insurers (PrivateHealth.gov.au).

Paying in advance

The Department of Health says some insurers offer "rate protection" to customers who pay in advance. With it, an increase during the prepaid period does not apply until that period ends. Without it, the insurer may ask you to pay the difference at the new rates or shorten the period your advance payment covers. This is not guaranteed, so ask your insurer in writing whether your prepayment is rate-protected before paying.

Changing the level of cover

A cheaper policy generally covers fewer services or carries a higher excess. Before downgrading, compare what is excluded and whether any waiting periods apply to services you might need. This article could not verify the detail of every cover tier, so use the policy documents and PrivateHealth.gov.au to confirm.

The Medicare Levy Surcharge

PrivateHealth.gov.au explains that taxpayers without private hospital cover who earn above the income threshold pay the MLS on top of the 2% Medicare levy. It covers you and your dependants. The 2026–27 thresholds and rates are:

Status	Income for MLS purposes	Surcharge
Single	Up to $105,000	0%
Single	$105,001 to $123,000	1.0%
Single	$123,001 to $164,000	1.25%
Single	Above $164,000	1.5%
Family	Up to $210,000	0%
Family	$210,001 to $246,000	1.0%
Family	$246,001 to $328,000	1.25%
Family	Above $328,000	1.5%

Source: PrivateHealth.gov.au. The family thresholds rise by $1,500 for each dependent child after the first.

To avoid the surcharge, you need approved hospital cover with a registered insurer for you and all dependants, with a maximum yearly excess of $750 for singles and $1,500 for families. Extras-only cover does not count, and days without cover are charged. As a hypothetical, a single person with MLS income of $120,000 and no hospital cover would pay 1% of that income, or $1,200, in surcharge. That figure is one input into the decision, not a recommendation to buy cover.

Home, Contents and Car Insurance

Moneysmart's guidance for general insurance is consistent across its car and home pages:

• Compare before renewing. Staying with your current insurer may cost more. Comparison websites are usually paid by insurers and may not show every product, so check more than one source (Moneysmart: car insurance).
• Cheaper is not always better. Check the sum insured, the excess, the exclusions, and the Key Fact Sheet, which insurers must provide so policies can be compared side by side. Review your sum insured if you have renovated or not checked in 12 months (Moneysmart: home insurance).
• Ask your insurer. Moneysmart reports that about 31% of customers who asked got a lower premium without reducing cover. Ask whether they can match a quote and whether you are getting all eligible discounts.
• Pay annually if you can. Paying by instalments can cost 10–20% more over the year.

Loyalty Pricing

ASIC has alleged in court that two IAG subsidiaries misled home insurance customers about loyalty discounts under the SGIO, SGIC and RACV brands, with premium increases possibly applied before discounts. The alleged conduct covers 25 August 2017 to 24 August 2023. ASIC's liability hearing concluded on 1 May 2026 and judgment is reserved, so there is no finding yet (ASIC). It is an allegation about one group, not proof of how all insurers price.

Checklist

• Read your renewal notice and note the increase and the new premium.
• Check your insurer's average change on health.gov.au and compare policies on PrivateHealth.gov.au.
• Before paying in advance, confirm in writing that rate protection applies.
• If you are near an MLS threshold, check that hospital cover and excess meet the rules for you and every dependant.
• At renewal for home, contents and car, compare like with like on sum insured, excess and exclusions, not just price.
• Ask your insurer to match a quote, and pay annually if affordable.

Next Steps

Use the calculator below to compare premiums on your own numbers, entering the excess for each quote. Then confirm the policy details before you switch or downgrade.