An average of 3.73 per cent on health insurance premiums is expected from April. (Supplied: Pexels)
In short:
Health insurance premiums will rise by an average of 3.73 per cent from April.
The rise comes after three rounds of negotiations between the health minister and insurers.
What's next?
Health funds say they're doing everything possible to ensure insurance remains affordable.
Health insurance premiums will rise by an average of 3.73 per cent from April after lengthy negotiations between the federal government and insurers, with the opposition describing the hike as "another hit" to Australian household budgets.
Health Minister Mark Butler had previously ordered private health insurers to go back to the drawing board on three occasions and come up with a more "reasonable" premium increase, as the government tried to fend off a political headache on the eve of a federal election.
Mr Butler said the increase of 3.73 per cent was "justified and proportionate."
Health Minister Mark Butler says the increase is "justified and proportionate". (ABC News: Ian Cutmore)
"In December, I wrote to every single one of the 29 insurers asking that they sharpen their pencils and provide us with an increase that was more in the interests of their members," Mr Butler said.
"Based on the resubmissions, I was not prepared to tick and flick their asks and instead asked them to resubmit again.
"We've now ensured a better deal for the 15 million Australians with private health insurance."
Every year the health minister must approve the annual premium rises, which impact more than half of the Australian population who have some form of private health insurance.
While the rise is below health inflation, it is above household inflation, with the additional hip-pocket pressure coming ahead of an election that will largely be fought on cost-of-living issues.
Health insurance premiums rose an average of 3.03 per cent last year, but health funds argue the costs they are paying out increased by between 8 to 10 per cent.
Insurance boss warns further premium rises likely
Photo shows Two people stand underneath a large silver sign that reads "IAG" in purple font on the side of an office building.
Private Healthcare Australia CEO Rachel David said the premium increase was necessary for health funds dealing with the rising cost of healthcare.
"Every premium increase is carefully calculated and regulated. We know people with health insurance are impacted by cost-of-living pressures, so health funds are doing everything possible to ensure health insurance remains affordable and accessible for Australians," Dr David said.
"We know Australians are doing it tough and that many of our members are not wealthy. Forty per cent have a taxable income of $50,000 per year or less and 10 per cent of these people are on the aged pension as their only income.
"Health funds will continue doing everything possible to avoid driving up members' health insurance bills unnecessarily, while still providing value for money."
Healthcare is expected to be a prominent feature of the upcoming federal election campaign. (Adobe Stock: Gorodenkoff)
Shadow Health Minister Anne Ruston said the rise was the highest premium increase in seven years.
"It is another hit to Australians' household budgets at a time when they can least afford it,"
she said.
"The Albanese government has hidden this cost hike from them for months, leaving Australians with private health insurance minimal time to prepare their budgets and shop around."
But Labor argued Opposition Leader Peter Dutton increased premiums by 6.20 per cent in 2014 when he was health minister.
Healthcare will be a prominent feature of this election campaign, with Labor on Sunday promising to spend $8.5bn over four years incentivising doctors to bulk-bill, promising it would lead to 9 out of 10 GP visits being free for patients by 2030.
The promise was swiftly matched by the Coalition.