Millions of Australians have copped their latest cost-of-living squeeze, with a sharp rise in health insurance premiums this week adding hundreds of dollars to some bills.

A federal government-approved price rise averaging 3.03 per cent hit households on Monday, with iSelect analysis finding that singles will pay about $71 more, while families face a squeeze worth up to $149 a year.

iSelect expert Sophie Ryan said many families are worried they’ll need to scale back their cover to afford the increases, which come amid much wider cost pressures.

“Aussies are really feeling the pinch,” Ryan said.

“It’s going to be a tough pill to swallow for many.”

The 2024 increases are the largest since 2019 and come after a series of cost increases across the healthcare industry as well as a spike in demand for elective surgery post-Covid.

And because 3.03 per cent is the average increase, some households will pay even more, with accusations from consumer advocates that health funds are using sneaky pricing tactics.

Ryan said now is the time for Australians to take action and start to control their insurance bills, particularly if you haven’t reviewed your existing cover in some time.

That’s because changes in your circumstance or the broader market might have locked you into a deal that doesn’t suit your needs and costs more than you need to pay for insurance.

“Your health fund is required to let you know by how much your policy is increasing,” Ryan said.

“That should be your cue to shop around. Too often people can fall into the trap of setting and forgetting.”

Health isn’t the only type of insurance that’s soaring in price, either.

Both home and vehicle insurance premiums have also soared recently as the industry tries to recoup billions in natural disaster-related costs incurred over the past few years amid widespread flooding across the eastern coast.

Funds in all categories, but particularly health, are trying to lure Australians with big discounts at this time of the year, targeting those who are trying to avoid the increases.

But Ryan warns that consumers need to be careful and avoid being sold on a policy – whether that’s health insurance or another kind – that doesn’t actually fit their needs.

“Many health funds are offering things like gift cards, weeks free or waiting periods waived to attract new customers,” Ryan said.

“Don’t be lured in just by the cheapest policy.”

There are things you can do to minimise your health insurance premiums, including increasing your excess payment, which could make sense if you’re not expecting to have a hospital stay in the near future.

Also consider what extras cover you actually need as a comprehensive policy with limited flexibility could see you paying higher premiums for services you’re unlikely to use, Ryan said.

There are also options available that let Australians combine their extras limits across multiple services, so if you visit the dentist often but never need a physio you can ensure you’re getting value from your coverage.

Previous analysis has also indicated that Australians should look beyond just the big funds when shopping for health insurance, with cover of the same quality found to be considerably cheaper.

Keep in mind that health insurance is regulated by the Australian Prudential Regulation Authority (APRA), which means you’re protected if anything goes wrong, taking the risk out of opting for a smaller provider.