Health insurance premiums just got a whole lot more expensive.

The rise, which was approved by the Federal Government, was the largest price hike in almost 10 years, with premiums heading northward by an average of 6.2 per cent, according to the federal Department of Health.

“We’ve been contacted by over a quarter of a million consumers during March in the lead up to the price rise,” said iSelect‘s Matthew Cuming, who added that consumers were very worried about the price rises.

For the average family, the additional cost could amount to hundreds of dollars each year.

“Your typical family private health insurance policy now costs around $4000 a year, so with the price hike that will rise by around $250 a year,” said Kirsty Lamont, spokesperson for comparison website Mozo.

A lot of people will be thinking twice about whether it’s really worthwhile maintaining their private health insurance

“A lot of Australians will be feeling the impact of the price hike on their hip pockets, and a lot of people will be thinking twice about whether it’s really worthwhile maintaining their private health insurance in light of these price hikes.”

The higher fees will apply to both forms of health insurance: hospital and extras.

The increase will prompt many consumers to rethink their coverage, according to CHOICE head of media Tom Godfrey.

“Unfortunately many consumers are feeling the pinch when it comes to private health insurance, with many downgrading their level of cover to accommodate increased premiums,” Mr Godfrey said.

But with over 34,000 plans health insurance products on the market, price shouldn’t be your only consideration. Here are five tips to help you review your coverage.

1. Don’t panic

Take a deep breath and avoid making an emotional decision to cancel your policy just yet.

“Our advice is not to panic and not to do a dump and run,” said Ms Lamont of Mozo.

2. Get advice

Speak to an expert and look at the online comparison websites, such as iSelect, Mozo, CHOICE and Canstar.

3. Trim the pointless extras

You could be paying for coverage you don’t need.

“The best thing to do is assess your current policy and work out whether you’ve got the appropriate cover for your current circumstances,” said Kirsty Lamont. “Just by making changes to your policy, and making sure that it matches your current situation, you can end up making some significant savings.”

iSelect’s Mathew Cuming said that many of customers were paying for more than they need.

“We speak to many consumers who are in their retiring years, for example, who are still covered for benefits such as pregnancy and obstetrics, even though they’re not planning and in some instances unable to have any more children,” he said.

Young adults are also often paying for unnecessary coverage such as hip and knee replacements, which Mr Cuming said they are highly unlikely to need “unless you’re an elite athlete”.

4. Consider switching providers

After you’ve done your research, give some thought to where you’ll get the best value for money. As an example of the difference between providers, the price of identical hospital cover can differ by up to $800 a year between different insurers, said Mr Cuming.

The refund you get back on dental costs can also range from 32 to 60 per cent, according to CHOICE.

“Consumers should consider switching insurers if they’re not getting a good deal with their existing policy,” said Mr Cuming. “It does pay to shop around.”

Your new provider must by law honour the waiting periods of the previous policy, Mr Cuming said. While this legal protection does not extend to extras, some providers offer this as well.

5. Weigh up whether you need hospital insurance

If you earn less than $88,000, you might be better off relying on the public hospital system instead of opting for expensive private hospital coverage.

“For more complex and expensive medical conditions, you’ll end up in a public hospital regardless of whether you have private hospital insurance or not, because public hospitals have the equipment,” said Tom Godfrey at CHOICE.

“But, if you need elective surgery, such as cataract eye surgery or a hip replacements, private hospital insurance can be a good idea,” Mr Godfrey said. “It allows you to jump the waiting list, choose your own doctor and get treatment in a private hospital, which can be more comfortable.”

If you have any concerns or complains about your health insurance plan, you should direct them to the Private Health Insurance Ombudsman.