Around 15 million Australians have private health insurance, but many have not made any claims in the past year. Rising insurance premiums and the cost of living are causing some to consider cancelling or downgrading their policies. However, experts warn this could be risky.
Petrus Buys, a 29-year-old civil engineer from the Sunshine Coast, took out health insurance for his family after his son was born last November. Although he has not yet made a claim, he pays $100 a month for hospital and extras cover. Buys says the cost is worth it for the peace of mind it provides, especially for dental care, which Medicare does not cover.
“I sleep better knowing I’m covered for critical things,” he said. “For $100 a month, I’m comfortable with that cost.”
Research from Finder shows that 38% of Australians with health insurance did not claim on either hospital or extras cover in the last 12 months. Another 32% only used extras like dental or physiotherapy. Only 17% claimed on both hospital and extras. Finder’s health insurance expert Tim Bennett said many people pay for insurance but forget to use it.
“Health cover is a safety net for unexpected illness or injury, but for many, it feels like dead money,” Bennett said. “People often forget they can claim dental check-ups, physio visits, or optical rebates. Using these benefits can make your policy more valuable.”
The rising cost of living is also forcing some Australians to delay medical care. Research from iSelect found that 33% of people are postponing routine check-ups, such as dental, hearing, and cancer screenings, while 31% are delaying GP visits.
Health insurance premiums increased by an average of 3.73% in April 2025, the largest rise since 2018. About one in three policyholders are considering cancelling or downgrading their cover due to these costs.
Buys said his family feels the financial pressure. “We spend about 40% of our income on our mortgage,” he said. “Groceries and bills are also going up. We’re cutting back on holidays and visits to family overseas.” He is even considering side jobs to increase income.
Tim Bennett advises Australians to review their health insurance policies carefully. “Don’t waste money on a policy that doesn’t fit your needs,” he said. “Now is a good time to shop around as insurers compete before the new financial year.”
Buys plans to review his policy at renewal and use extras benefits for dental and optical care to get more value from his insurance.
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