New research indicates that a significant number of Australians are set to cancel their private health insurance due to soaring premium costs. According to Finder, a comparison site, the increase in prices is anticipated to drive a wave of policy cancellations. Specifically, a survey of 1,012 individuals found that 16 per cent—or approximately 3.3 million Australians—are considering dropping their health cover in 2025 for more affordable options. Only 41 per cent of respondents plan to remain with their current provider, while nearly a quarter do not hold any private health insurance.
As health insurance premiums are projected to rise by an average of 2.73 per cent come April, the total cost for an individual health policy is expected to increase by about $72 annually, bringing the average annual cost to around $1,848. Finder’s health insurance expert, Tim Bennett, noted that many Australians are facing financial strain from rising living expenses, prompting them to reconsider their health insurance options.
The demographic most likely to cancel their coverage includes younger Australians aged 18 to 35, often referred to as Gen Z and Millennials. Bennett advises that instead of outright cancellation, individuals should explore options such as modifying their coverage or reviewing different plans to find one that better suits their financial situation.
Despite the inclination to cancel insurance, Bennett cautioned that forgoing private health coverage might result in higher out-of-pocket expenses, extended wait times for medical services, and restricted access to essential care. As premium increases loom, he recommends that now is an opportune moment for consumers to shop for various insurance alternatives, as different insurers are implementing different rates of increase. Australian government data reveals that while some insurers are imposing substantial hikes, others are raising premiums more modestly, or in some cases, not at all.
With the cost of health insurance on the rise, it is prudent for Australians to evaluate their current plans and make informed decisions that align with their financial circumstances while ensuring their health needs are adequately met.