April 1: from higher private health premiums to higher electricity bills

April Fool’s Day is certainly no joke when it comes to private health insurance and electricity bills.

Average private health care premiums are rising by 4.4 per cent on April 1, up from a 3.7 per cent increase that came into effect this time last year.

The increase in premiums is also above the 3.7 per cent overall inflation rate for the year to February and well above the overall rise in healthcare costs of 3.2 per cent in the Australian Bureau of Statistics consumer price index data.

For Australia’s 12.7 million people with private health insurance, today will mean an extra $109 a year on average to finance private health insurance.

Basic family cover costs are increasing by $94 to $2216 while equivalent individual cover is typically increasing $47 to $1107, Canstar data shows.

Gold cover for families goes up by $330 to $7821 while for individuals, it’s rising by $167 to $3957.

This follows a decision from Health Minister Mark Butler made on February 17, nine days before the US air strikes on Iran pushed up fuel prices, where he argued a bigger average increase in premiums was justified to reflect “increasing wage bills and securing the viability of private hospitals”.

The increasing cost of providing doctors and medicines, from the global oil shock, is likely to see private health insurance premiums rise by even bigger numbers in a year from now, AMP economist My Bui said.

“Health has been one of the areas that has seen higher than average inflation rises,” she told The Nightly.

“For us economists, I guess the worry is that insurance price actually tends to lag other areas in the CPI basket - it depends on how much they need to compensate doctors or clinics for either pharmaceutical products or actual services.

“Now that we have already seen a little bit of uptick in medical prices, it’s starting to flow on to insurance and it’s not likely to go down any time soon.”

The private health insurance increase affects 45.6 per cent of the population, based on Australian Prudential Regulation Authority data.

The average private health care premium will jump from $2486 to $2595, covering those under 36 to those over 60.

Customers are advised to look at switch policies, with financial comparison group Canstar’s data insights director Sally Tindall saying moving to the same or lower cover with another insurance could be done without having to reserve any hospital waiting periods.

“This misunderstanding alone could be stopping many Australians from exploring better value options,” she said.

“With costs ramping up yet another notch, now’s the time to take a closer look at every recurring expense in your budget and health insurance should be near the top of the checklist.”

Quarterly electricity bills are also increasing with April 1 covering the March quarter, the first full three-month period after the Federal Government’s $75 quarterly rebates finished at the end of last year.

The rebates were already being phased out in 2025 which meant bills arriving in February showed charges were 37 per cent higher compared with a year earlier in the inflation data.

But there is hope with the Australian Energy Regulator’s default market offer for 2026-27 expected to see a 10.1 per cent drop in household bills from July for customers in NSW, south-east Queensland and South Australia.

Canstar said this could save the typical household $226 a year.

That’s before higher liquefied natural gas and coal prices eventually see electricity bills rise again in 2027, Ms Bui said.

“This is like secondary-round impacts from higher oil and gas prices - commodity prices tend to go up as well,” she said.

“We’re probably going to see it feed back into the electricity market at some point in the future.”