Private health cover grows as hospital out-of-pocket costs jump 7.5%

More Australians are holding private health insurance, but the latest APRA statistics show that having cover is not preventing significant increases in household health costs.

At 30 June 2026, 12.82 million Australians had private hospital cover, equivalent to 45.8% of the population. That was up from 12.53 million people and 45.4% a year earlier.

General treatment cover also continued to grow, reaching 15.53 million people, or 55.5% of the population.

Insurers are paying more as well. Average hospital benefits paid per insured person increased from $1,521.73 in the year to June 2025 to $1,553.48 in 2026, an increase of around 2.1%. Ancillary benefits per insured person increased around 3.7%.

But the politically important number is what households are still paying themselves.

APRA reports that the average out-of-pocket cost for a hospital episode reached $513.24 in June 2026, 7.5% higher than a year earlier, and roughly twice the pace of inflation. Average out-of-pocket costs for ancillary services such as dental, optical and physiotherapy rose 5.6% to $64.05.

There is an important qualification. The average medical gap, where a gap was charged, actually fell 4.5% to $260.74. APRA's broader hospital out-of-pocket measure also incorporates excesses and co-payments, so the increase cannot simply be attributed to specialists raising their fees.

Nevertheless, the political message is straightforward. Private health insurance membership remains resilient, but insured Australians are still confronting rapidly rising costs when they use the health system.

For households already paying private health insurance premiums, a 7.5% increase in hospital out-of-pocket expenses adds another dimension to Australia's continuing cost-of-living debate.

Source: APRA, Quarterly Private Health Insurance Statistics, June 2026.