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Increases to health
insurance premiums:

At Bupa, we work hard to keep health cover as affordable as possible. However, there are several key factors that impact premiums – many of which are out of our control.

A look at why premiums go up each year

Premium increases are driven by several complex factors:


An ageing population
puts increased pressure
on our health system

Member First

Rising consumer
expectations about
tests and treatments

Member First

Access to new and
improved, but often expensive, medical technology and treatment options

Member First

The increasing cost
of healthcare delivery
such as wage costs

Member First

The decrease in
the Australian
Government Rebate

Member First

Australia's ageing population

Everyone deserves access to the best possible care. However, as world-class healthcare helps Australians live longer lives, an ageing population also puts additional pressure on our health system to deliver ongoing care. In the last two decades, the number of people aged 85 years and over has more than doubled, compared with a total population growth of 32% in that same time. And that number is projected to double again by 20341


Increasing costs of healthcare delivery such as wage costs

The costs of healthcare services are increasing dramatically across Australia, and that’s why we're working with hospitals, doctors and our networks to make access to healthcare as affordable as possible for our members.
For example, according to Bupa data comparing the last two years, hospital costs for general medical admissions grew by 10%, claims for babies requiring admission grew by 9%, and benefits for stroke grew by 33%.

New and improved, but often expensive, medical technology and treatment options

The availability of new and improved, but often more expensive, medical technology and treatment options is giving consumers access to faster and better treatment options. For example, customers can now receive treatment laparoscopically (often known as ‘keyhole surgery’) which a doctor can perform on the same day and the patient will likely experience less pain. However it’s often costlier and that’s why the amount we pay out in claims goes up each year, and at a significantly higher rate than the consumer price index (CPI).

What Bupa is doing to help reduce costs for members

We understand that increasing health insurance costs create difficulties for many Australians, and are always looking at ways to keep our members’ costs as affordable as possible and to deliver better value. Here’s some examples of how we have enhanced our products, features and benefits in 2016 and will continue to do in 2017.

Expansion of no gap for kids on selected family packages*

No gap for kids on podiatry consultations on selected family packages*

100% back on optical for kids on selected family packages*

New podiatry network for Bupa members

Medical gap expansion
reducing out-of-pockets

New senior telephonic support program

Health funds are consistently paying out the highest percentage of the premium back to customers of all insurance types – an average of 86c in the dollar. This compares with the 67c for property insurance and 62c for general insurance.

Cost of prosthesis (artificial devices like hip replacements)

We’re also working with the government to ensure its health system reviews target the ineffective aspects of the system which are impacting private health insurance costs.
Some items, like prosthesis, are set by the Australian Government. To make these items more affordable, we successfully lobbied with other insurers to have the price of some prosthetic items reduced. We have agreed to pass on these savings to all our members, which means that our premium increases in 2017 will be an average of $15 less for every membership.
We will continue to lobby for further price reductions which will be passed onto our customers, as Australians are still paying amongst the highest prices in the world for medical prostheses.

Why a lower Government Rebate impacts premiums

The Government Rebate is the Government’s contribution to the cost of health insurance. The Rebate was originally set at a 30% reduction in a customer’s premiums. However, on 1 April 2014, they announced that the Rebate will be based on whatever is lower:

price index

The Consumer Price index

(general measure of inflation based on the cost
of a ‘basket of household goods’)

average premium

The average health insurance
premium increase

The result of the change, is that in 2017 the rebate amount is now closer to 26% (for customers under 65 not affected by income testing). For example, a 30% rebate on a $4,500 premium would have been a saving of $1,350, however a 26% rebate on the same premium would result in a saving of $1,170.

1ABS. 3101.0 - Australian Demographic Statistics, Jun 2014 [Online] 2014 (Last accessed Feb 2016). Available from: AIHW. Australia's welfare 2015. Australia's welfare series no. 12. Cat. no. AUS 189. 2015; p 85.
22ABS. 3302.0.55.001 - Life Tables, States, Territories and Australia, 2013-2015 [Online] 2016 [Accessed Jan 2017] Available from:
*At Members First providers for most dental, chiro, physio, optical and podiatry consultations. Excludes orthodontics, orthotics and hospital treatments. Fund and policy rules, waiting periods and yearly limits apply. Child dependants only. Available on our family packages, Ultimate Health Cover and selected extras when taken with hospital cover on a family membership.