Need to know
- We found the price of top-level Gold hospital cover has increased by about 45% in the past four years
- These price increases are much higher than the 11.9% average increase across all levels of cover (Bronze, Silver and Gold) reported by the Department of Health and Aged Care
- A sneaky tactic employed by health insurers is quietly closing cheaper Gold policies and releasing much more expensive policies for new customers
The federal government has picked up on a CHOICE analysis of hospital insurance pricing data that shows health insurers are pushing up the price of top-level cover at a much higher rate than the advertised averages.
Every year, the health insurers must seek government approval to increase their premiums on 1 April. But the insurers only need approval to raise premiums for existing policies, not new policies. CHOICE has found that health insurers avoid the premium approval process by closing existing policies, and opening a new policy with the same or similar cover, but with a jacked up price.
This has contributed to out of control health policy inflation. Gold hospital cover in particular has increased by about 45% in the past four years. The 'approved' premium increase over the same period was 11.9% across all hospital and extras policies.
CHOICE found that health insurers avoid the premium approval process by closing existing policies, and opening a new policy with the same or similar cover, but with a jacked up price
Minister for Health and Aged Care Mark Butler says the practice highlighted in the CHOICE investigation is "not strictly against the law" but is "underhanded and contrary to the spirit of the law". The minister called on health insurers to change their behaviour, or he'll "consider legislative options to outlaw the practice into the future".
Top cover even less affordable
In 2021, a family in NSW paid on average $5380 for a Gold hospital policy (with a $750 excess) per year. Now, the average price has blown out to $7840 per year.
A single person in 2021 paid around $224 per month, or $2690 a year, for Gold hospital cover (with a $750 excess). Today they'd get slugged with premiums closer to $327 per month, or $3920 per year, on average for the same level of cover.
The big five health funds – Medibank, Bupa, HCF, HBF and NIB – have implemented substantial price rises.
Our analysis, which compared policies available to new customers four years ago with those available now, found the cost of their Gold hospital policies has skyrocketed, most with increases even higher than the Australian average of 45%.
The big five health funds – Medibank, Bupa, HCF, HBF and NIB – have implemented substantial price rises
Looking at policies in NSW with a $750 excess, Medibank's January 2025 Gold hospital policy cost 53% more than the policy they offered in 2021. NIB's Qantas Gold policy is 48% more expensive, and HCF's offerings are about 47% higher than those available in 2021. Only Bupa's increase comes in slightly less than average at 43%.
In WA, HBF's current Gold policy is 60 to 69% more expensive than the Gold policy it was selling four years ago.
Sneaky tactic 1: Close cheaper policies; replace with more expensive ones
Health insurance is highly regulated. Health insurers can only increase premiums once a year and they must seek approval from the Minister for Health and Aged Care to do so.
But at any time health insurers can close policies to new members. Insurers can also release new policies at any time. And we've found many instances of funds closing existing policies to new members while at the same time opening new policies that offer essentially the same cover but with a slightly different name and a much higher price tag.
Even when some funds keep cheaper Gold policies open to new customers, they don't advertise them – they spruik their newer, pricier policies instead
For instance, in June 2022, HBF closed their Gold Hospital policy in WA, which cost $215 per month with a $750 excess. They then released their Gold Hospital Elevate policy to new members at $280 per month, which was essentially the same cover with a 30% increase in price.
And in October 2023, the top hospital policy Medibank offered with a $750 excess was Gold Complete Hospital, which cost NSW customers $255 a month. In November, Medibank closed this policy and released Gold Protect. This was essentially the same cover, but costs $300 per month at the same excess level – which is an extra $525 per year, or 17% more.
Other price jumps we found include these NSW policies with $750 excess:
- In August 2023 NIB closed their Qantas Gold Hospital policy, which cost $280, and released Qantas Gold Top Hospital for $325 (17% jump).
- In April 2023 Bupa closed their Gold Complete Hospital policy, which cost $265, and released Gold Comprehensive Hospital for $305 (15% jump).
- In March 2022 HCF closed their Hospital Gold policy, which cost $235, and released Hospital Premium Gold for $285 (more than 21% jump).
For our analysis, we looked at individual policy examples in NSW for Bupa, Medibank, HCF and NIB, and we looked at WA for HBF. Read more under 'How we calculated the increases'.
Sneaky tactic 2: Show new customers the expensive policies only
We've also discovered that even when some funds keep cheaper Gold policies open to new customers, they don't advertise them – they spruik their newer, pricier policies instead.
Medibank has two Gold policies available to new customers – at the $500 excess level there's Gold Advanced, which costs $283 per month in NSW, and Gold Protect, which is $345 per month.
But only the Gold Protect policy is shown on the Medibank website, which means many people don't know the cheaper option exists.
If you call the insurer and specifically ask for it, you should still be able to buy the cheaper policy. You can search all currently available health insurance policies using our independent health insurance finder.
How to avoid paying too much for health insurance
With the sky-high increases of Gold hospital insurance over the past few years and another premium increase on the way, health insurance has become even less affordable for people who really need it.
If you opted for top-level Gold hospital insurance 'just in case', now is the time to seriously think about dropping it or downgrading to more affordable cover.
And if you're thinking of upgrading to a Gold policy – for example, if you're planning to have a baby and want to deliver in a private hospital or you anticipate you'll need premium cover in the next few years – don't just automatically upgrade with your current fund. We often see that the best deals available are with smaller funds and restricted membership funds.
If you opted for top-level Gold hospital insurance 'just in case', now is the time to seriously think about dropping it or downgrading to more affordable cover
To help you make sense of your options, our health insurance comparison tool lets you compare policies from over 40 insurers. We're a nonprofit organisation and we don't take any commissions, so you can be sure we'll help you find the best policy for you (not what's best for the insurer).
Do you need Gold health insurance?
Gold hospital insurance policies are designed for people who want to be covered for specific health needs. For example:
- young families who are planning to have a baby and want to deliver in a private hospital
- people who need hip or knee replacements or cataract eye surgery
- people who need end-of-life palliative care
- families with a child who has a serious eating disorder needing in-hospital care
- young people with mental illness and mothers with serious postnatal depression who need in-hospital psychiatric care
- people who need rehabilitation after an accident or stroke
- people who need weight-loss surgery
- people with chronic pain; for example, because of coronary heart disease.
Why are the insurers increasing Gold Hospital policies?
Health insurers justify their price rises as they say they are in line with the increasing cost of health care, particularly on the services covered by Gold policies, as well as the risk profile and claims statistics associated with top-cover Gold policies.
Nonprofit insurer HBF told us: "In looking specifically at our Gold policies, the claims HBF pays to members continue to be higher than the premiums we receive."
Insurers also said that by opening new policies they were able to limit the premium increases for people on closed policies.
Australia's creaking health insurance system
Insurers, especially nonprofit funds, set prices based on their costs. But transparency is important, especially in an area such as health care where potentially sick and vulnerable people need to be able to rely on their health insurance.
When there is such a considerable difference between the highly publicised average premium increases and the reality of the higher prices affecting a range of Australians, it hinders our ability to make informed choices about health insurance.
Australian taxpayers are propping up private health insurers who are selling us increasingly unaffordable health insurance
Top-level Gold cover is designed for the many Australians who have specific high-level needs, such as management for mental health conditions or care in a palliative or rehabilitation facility.
Health insurers are using these sneaky tactics to inflate prices for people who need health insurance for things such as surgery, management of chronic pain, or end-of-life care. Often these are the people who can least afford higher premiums.
Taxpayers fork out more than $7 billion annually to private health insurers. In return, private health insurance is meant to complement the creaking public Medicare system to help Australians pay their medical bills.
Instead, Australian taxpayers are propping up private health insurers who are selling us increasingly unaffordable health insurance.
Stock images: Getty, unless otherwise stated.
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