Australians are drawing on private hospital care from birth through older age, with new analysis from Private Healthcare Australia (PHA) showing that insured patients use their cover for neonatal intensive care, mental health treatment, chronic disease management, and joint replacement surgery at different stages of life. According to PHA, these life-stage patterns in hospital use occur alongside rising claims costs and premium adjustments across the private health insurance sector.
CEO Dr Rachel David said the public discussion about annual premium increases often does not address how members rely on their cover over time. “Every year, we see people reconsider their cover when premiums change. But the reality is, most Australians don’t value their insurance until they face an unexpected health issue. Health insurance isn’t something you buy for the person you were last year; it’s protection for the life stage you’re moving into. It’s important to consider what you and your family might need in the year ahead and whether that is readily available in the public system,” David said. Around 15 million Australians hold private health insurance, including about 12.6 million with hospital cover. Health funds’ benefits for medical and hospital services increased by 5% in 2025 compared with the previous year, above the average approved premium rise of 4.41% for 2026.
PHA’s review of 2025 claims indicates that, in early childhood, families commonly use private cover for neonatal intensive care, tonsil and adenoid surgery, insertion of ear tubes (grommets), and dental procedures. For many parents, private cover is used to obtain treatment from specialist doctors and to schedule surgery for children rather than waiting in the public system. Among teenagers and young adults, hospital policies are frequently used for same-day mental health care provided by psychiatrists, diagnostic procedures such as endoscopy and colonoscopy, knee reconstructions, and other sports-related procedures, and dental work. “One of the biggest shifts is how younger members are using private cover for mental health care and early diagnosis, not just emergencies,” David said. For people aged 25 to 44, claims tend to cluster around major life events and early intervention. Common hospital claims at this stage include childbirth, reproductive services such as IVF, endoscopic procedures, and mental health treatment.
From the mid-40s onwards, claim patterns shift toward prevention and management of existing conditions. Health funds report substantial use of cover for colonoscopies for cancer screening, cardiac investigations, treatment of bone and joint problems, and services for mental health and substance use. Among older Australians, private hospitals are a common setting for procedures linked to mobility and daily functioning. Most rehabilitation services and more than half of joint replacements occur in the private sector, with regular claims for hip and knee replacements, eye surgery, and cardiac care.
The life-stage claims trends sit alongside the upcoming average 4.41% premium increase from April 1, 2026. PHA links the adjustment to higher utilisation of hospital services and the cost of care for an ageing population with complex chronic conditions. “More people are using their health insurance for high-cost hospital care such as joint replacements and cancer treatment, and the cost of delivering care continues to rise. This premium increase reflects those realities. If health funds could keep premiums the same without jeopardising their ability to pay claims, they would. The industry is acutely aware of how tough many Australians are doing it right now,” David said. The premium change will also increase payments to private hospitals with higher operating expenses and changed occupancy patterns after the pandemic. “Private hospitals are a critical part of Australia’s healthcare system, and this adjustment will help ensure they remain viable and available when patients need them,” David said.
The emerging claim profile is consistent with products structured around life stages, including mental health use among younger cohorts and services linked to prevention and chronic disease management in midlife and older age. Funds have introduced measures intended to reduce out-of-pocket costs, an ongoing concern for members. David said health funds are increasing no-gap and known-gap arrangements and backing models of care that allow some treatment to occur at home. “We’re seeing more no-gap and known-gap fee services to give people greater certainty about costs, along with new models of care that allow patients to safely receive treatment at home. These include services such as drug and alcohol rehabilitation, chemotherapy, and post-surgical care. These innovations are helping patients save money, reduce travel and recover in greater comfort. This is the future of accessible, affordable care,” she said. Health funds also offer health management and prevention programs for members with chronic conditions, with the stated aim of reducing the need for higher cost interventions in the future.
With premiums changing from April 1, PHA has encouraged Australians to review their policies in the context of current and anticipated health needs rather than relying solely on price comparisons. Considerations for policyholders include whether their health profile or life stage has shifted, whether their policy covers procedures common in their age group, how they would value earlier access to surgery or mental health care, and what waiting periods would apply if they downgrade or cancel and later reinstate cover. David said: “Australia’s health system works best when private and public hospitals work together to balance access to care. Having the right level of health insurance allows you to choose your own specialist doctor and receive care when and where you want it. Premium rises understandably prompt people to review their cover, but it’s important to think about when you’re most likely to need it for yourself or your family.”
