Australians have been squeezed by a 200 per cent hike in health insurance premiums over the past 20 years, according to new analysis that suggests even more bill pain awaits families.

Data published on Wednesday by Finder showed health insurance costs have risen at more than twice the pace of broader inflation since 2000, with a policy once priced at $1000 now costing $3038.

More than a quarter (28 per cent) of consumers now also say health insurance is among their most stressful expenses, up from 21 per cent last year.

Health insurance expert Tim Bennett said there are many reasons for the huge premium increases, but the primary driver is the ageing population and fewer young people taking out health cover.

“The cost of providing health insurance has gone up more than inflation,” Bennett explained.

“Broadly speaking, [the ageing population and fewer younger policy holders are] the reason that health insurance has increased out of step with inflation over the past 20 years.’’

Older Australians are more expensive to insure, particularly amid rising rates of chronic conditions.

It is a trend that medical experts warn will worsen over coming decades.

Bennett said premiums are likely to continue rising, though perhaps not by as much as they have in the past year.

“We are probably going to get back to a stage of price rises every year that are slightly ahead of inflation,” Bennett said.

Health insurers book big profits

Health insurance bills have risen by double digits for many customers on their latest renewal notices and some of the big funds have been accused of using “sneaky tactics” on consumers.

Major insurers like NIB and Medibank have also reported strong profits in the past week after price hikes for consumers.

NIB told its investors earlier this week that profits had soared 21.7 per cent over the half year to December to $104 million.

Medibank, meanwhile, revealed last week that profits had risen to $262 million in the period, up by 16.3 per cent.

Bennett said that high premium increases this year come after several years of smaller rises after COVID-19 when fewer people were making major claims for elective surgeries.

Those claims have now returned to normal, and broader cost increases across the health industry have ultimately flowed through to the latest renewal notices hitting many families.

Saving money

There are ways to avoid the worst of the squeeze through, including tinkering with your cover to ensure it suits your needs at the right price – TND has a recent article exploring that here.

Bennett said Australians should also look beyond the big funds, with analysis of the best deals on the market finding that the non-profit sector is a strong performer.

That includes HBF, which was handed Finder’s award for best-value health fund in 2024 after a comparison of more than 400 policies.

Australians can also move the dial on their excess without changing their policy, which can reduce the effect any premium hike may have.

Premium insurance policies have also been subject to some of the steepest price hikes over the past year, so make sure to consider carefully for what you actually need to be insured.

“Remember to read the fine print to know what you’re covered for,” Bennett said.

“If you’re in it for the tax benefits, a basic policy could be enough. But if you have a complex health condition you might need to stick to a gold or silver policy.”