Private health insurers will increase their premiums by more than five per cent within weeks after winning approval from Health Minister Sussan Ley.
Policyholders with funds including Medibank Private, nib and Bupa will all start paying higher fees from April 1.
Ms Ley gave the green light on Wednesday, saying the average rise of 5.59 per cent for 2016 was below the 6.2 per cent allowed last year.
Labor estimates families will be slugged an extra $200 as a result.
Major health funds argue that the fee increases are needed to help them cope with the rising costs of healthcare, combined with Australia’s ageing population.
Medibank Private managing director George Savvides said its premium rises were the lowest in four years.
Australia’s biggest health insurer limited its premium hikes thanks to a focus on quality and affordability issues as well as a reduction in waste and inefficiencies in the healthcare system.
“With an ageing population, increasing prevalence of illness, and improvements in medical technologies, Australians are bing admitted to hospital more, and receiving more treatments each stay than ever before,” Mr Savvides said.
nib boss Mark Fitzgibbon said the insurer was faced with rising costs associated with benefits paid out to members.
“On one hand, this is positive, as customers are receiving value from their health insurance for needed treatment,” he said.
“On the other, though, it places upward pressure on premiums.”
Real healthcare spending is expected to outstrip economic growth by about two per cent, Mr Fitzgibbon forecast when he reported nib’s interim profit results in February.
Around 12 million Australians have private healthcare insurance, and a large portion of the policyholders are over the age of 50.
The major challenge is to get younger Australians taking up private healthcare insurance to help ease the burden of the nation’s ageing population, Mr Fitzgibbon told AAP in February.
“But we’ll never see prices go backwards. As an economy, the demand for healthcare is so explosive,” he said.
Bupa said the increasing costs of medical technology and healthcare delivery, along with Australia’s ageing population and a drop in the federal government rebates were behind its decision to lift premiums.
On average, Bupa premiums will increase by about $2.50 a week for a typical single person and $5.60 a week for a family, before any rebate or discount.
HEALTHCARE PREMIUM HIKES
* CUA up 8.95pct
* Health Partners up 7.14pct
* HCI up 6.9pct
* Australian Unity up 5.05pct
* Westfund up 5.94pct
* CBHS up 5.92pct
* BUPA up 5.69pct
* Medibank Private up 5.64pct
* NIB up 5.5pct
* GMHBA up 5.44pct
* HCF up 5.42pct
* HBF up 4.94pct
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