Health insurance a dispensable expense as pressures mount

New research from Finder has found a growing number of Australians are preparing to cancel their health insurance policies, as cost of living pressures mount amid an impending premium increase.

A survey of 1,012 Australians suggested that 16 per cent would not be renewing their private health insurance this year, while 22 per cent of respondents also said they do not currently have private health insurance.

The research indicated younger Australians were the most likely cohort to cancel their health cover, with 25 per cent of Generation Z and 20 per cent of Generation Y planning to cancel by the end of 2025.

This comes as the average cost of mid-range private health insurance for hospital cover costs around $154 for a single individual, amounting to approximately $1,848 per year. With premiums set to rise by 3.73 per cent by April 1, the average cover would rise to $160 per month or an extra $72 per year.

“Australians are abandoning their health insurance in large numbers as they grapple with the mounting pressures of rising living costs,” Tim Bennett, health insurance expert at Finder, said.

“Instead of cancelling, consider reducing coverage, modifying your extras, or comparing plans for more suitable cover. Decreasing your level of cover or increasing your excess are just a couple of ways to make cover more affordable.

“If you can afford to do so, paying your premium for the upcoming 12 months is a great way to avoid the increase and get some money back in your pocket.

“Dropping private health insurance may save money in the short term, but it risks significant out-of-pocket costs, longer waiting times, and limited access to essential services.”