If you've been scratching your head over your private health insurance bills lately, wondering why your premiums seem to be climbing faster than a wombat up a tree, you're not imagining things.
A sneaky practice called 'phoenixing' has been quietly draining the wallets of Australian seniors, and now the nation's top doctors are saying enough is enough.
The Australian Medical Association has thrown its considerable weight behind plans to outlaw this deceptive practice, which involves insurers closing an existing product offering before opening an almost identical one at a higher price outside the regulated premium round process.
Think of it as the insurance equivalent of a magician's trick—now you see your affordable policy, now you don't.
'The widespread practice of phoenixing is a major factor in consumers struggling to access the level of cover that meets their needs, and it is eroding public confidence in the private health system'
Dr McMullen also noted that private health insurance premiums have outpaced wages and inflation in recent years, even as insurers' management expenses and profits continue to climb.
What exactly is phoenixing?
Understanding phoenixing
Phoenixing occurs when insurers close an existing product offering before opening an almost identical one at a higher price outside the regulated premium round process.
This is done to circumvent the requirement for ministerial approval of the higher-priced premiums.
Essentially, they're giving their old policy a new name and charging you significantly more for virtually the same coverage.
It's when health insurers scrap an existing policy and relaunch it under a shiny new name, often with a hefty price hike attached. The name comes from the mythical phoenix bird that rises from its own ashes—except in this case, your wallet gets burned in the process.
An investigation by Commonwealth Ombudsman Iain Anderson found private insurers are charging new customers more, applying secret premium increases above what is allowed under the annual premium review process by closing and reopening policies. This means new customers taking out Gold tier policies are paying hundreds of dollars more than existing customers each year.
That investigation followed a February report by consumer group CHOICE, which found some insurers had increased prices by up to 47 per cent over three years through the loophole—a finding that prompted widespread public concern and caught the attention of Health Minister Mark Butler.
[The staggering cost to Australian families
The numbers are eye-watering. Consumer advocacy group CHOICE found that some insurers had increased prices by up to 47 per cent over three years through this loophole. Despite average premiums rising by an approved 11.9 per cent over four years, health insurer phoenixing jacked up the average price of Gold cover by 45 per cent.
To put this in real terms, in 2021, a family in NSW paid on average $5380 for a Gold hospital policy with a $750 excess per year. With phoenixing practices, that same family could now be paying thousands more for essentially the same coverage.
Warning signs of phoenixing
- Your insurer contacts you about a 'new and improved' policy
- The new policy name is slightly different but coverage appears similar
- You're offered a choice between keeping your old policy or switching
- The premium for the new policy is significantly higher
- The increase seems much larger than the annual premium round announcements
That's a staggering jump, especially for retirees and older Australians who rely on private health cover for peace of mind and timely care. For many seniors living on fixed incomes, these increases can mean the difference between maintaining comprehensive health coverage and downgrading to basic policies that might not cover the medical care they need most.
Where your money is really going
While families struggle with rising costs, the insurance industry is doing remarkably well for itself. The health insurance industry recorded its second highest after-tax profit of $2.13 billion, while also reaping $3.4 billion in higher management fees—that's $5.53 billion in just one year from the premiums Australians pay.
According to APRA, in 2024-25 the health insurance industry kept 16 per cent of customer premiums for themselves. Meanwhile, Medibank's share of this growing gouge as Australia's biggest health insurer saw its operating profit soar to $741.5 million, up 7.1 per cent from the previous year, yet Medibank's benefits payout ratio was only 82.9 per cent.
The contrast is stark when you consider what's happening to private hospitals. Private hospitals have been going backwards with annual funding shortfalls of over $1 billion a year for three straight years—the difference between what it costs hospitals to provide healthcare and what health insurance companies actually pay.
The big four's bigger increases
While some may be aware that the average premium increase awarded to insurers this year was 3.73 per cent, the average increases for the big end of town were much higher at 3.99 per cent for Medibank, 4.95 per cent for HCF, 5.1 per cent for BUPA, and 5.79 per cent for NIB. Many of the policies they offer rose by 8-9 per cent.
Given these four insurers capture about 75 per cent of the market, most families are paying way over the odds. For seniors who often need Gold-level coverage for comprehensive hospital and specialist care, these increases hit particularly hard.
Government and medical community fight back
Health Minister Mark Butler described phoenixing as an 'underhanded' and 'sneaky' practice in December 2024. Butler stated: 'It is not strictly against the law but...it is clearly against the spirit of the law. It is an underhanded, largely secret way of health insurers raising their prices outside of the usual approval process. This is sneaky...Policy holders or potential policy holders aren't made aware of this.'
The AMA supports changes that would force insurers to use only the annual premium round to seek approval for the pricing of new products, unless in exceptional circumstances.
However, the AMA argues those 'exceptional circumstances' must be clearly defined in legislation to prevent any possibility of insurers finding loopholes to implement product phoenixing.
The doctors’ body said this clarity was critical to stop insurers from rebranding old policies under the guise of innovation, which it warned undermines confidence in the private health system.
The medical community's backing is significant. Private hospitals play a vital role, especially as more Australians seek care outside the overwhelmed public sector, but unacceptable conduct from insurers threatens the integrity of the entire healthcare landscape.
'Private hospitals play a vital role, especially as more Australians seek care outside the overwhelmed public sector,' McMullen said. 'But unacceptable conduct from insurers threatens the integrity of our entire healthcare landscape.'
Serious consequences for rule-breakers
The AMA calls for serious penalties to apply for insurers that continue product phoenixing once legislative changes are implemented, stating 'There are just a few insurers that dominate the market in Australia, and given their extraordinary financial resources and profitability, severe penalties must be in place to deter illegal behaviour.'
Health Minister Butler has put insurance firms on notice that they risked being named and shamed or faced tougher legislation to stop unfair premium hikes if they did not 'do the right thing' by consumers.
The AMA said it would support government-imposed penalties on repeat offenders once new laws come into force, ensuring that phoenixing is no longer a profitable loophole for insurers.
What you can do right now
While we wait for legislative changes, there are steps you can take to protect yourself:
Review your policies carefully: Check your policy documents and premium notices closely. Look for any notices about 'new products' or policy changes that seem suspiciously similar to what you already have.
Ask direct questions: When your insurer contacts you about a new policy, ask specifically whether this is the same coverage under a new name and why the price is different.
Compare properly: Don't just look at policy names—compare the actual benefits, exclusions, and waiting periods. If they're virtually identical but one costs significantly more, you might be looking at a phoenix policy.
Consider your options: Remember that you can shop around during your cooling-off period, and you're not locked into accepting a phoenix policy just because your insurer offers it.
Did you know?
Did you know?
With over 25,000 health insurance products available, the landscape is increasingly complex and confusing for consumers. This complexity makes it easier for insurers to disguise phoenixing practices, which is why the AMA and government are pushing for stronger regulations.
When will relief come?
The Government has committed to legislate against product phoenixing, and the new approach comes as funds prepare their submissions for how much more than 15 million people could be asked to pay from April 1.
Health Minister Mark Butler told insurers that his decision-making will now take into account 'consumer value and market integrity,' marking the first time such factors have been included in the approval process since it was introduced in 1997.
The changes are part of the federal government’s plan to close regulatory loopholes that allow insurers to bypass price caps, and the AMA has publicly welcomed the commitment, saying it will restore fairness and transparency to the system.
While the timeline for specific legislation isn't yet confirmed, the government's Statement of Expectations to insurers and the AMA's strong backing suggest changes are coming sooner rather than later.
What This Means For You
The fight against phoenixing represents more than just a policy battle—it's about ensuring that older Australians can access the healthcare they need without being gouged by insurance companies exploiting regulatory loopholes. With doctors, consumer groups, and government all aligned against this practice, there's genuine hope that relief is on the horizon.
Have you noticed suspicious premium increases or been offered a 'new' policy that seems remarkably similar to your old one? We'd love to hear about your experiences with health insurance premium changes in the comments below.
Primary Source
https://www.9news.com.au/national/c...insurers/72f8d1de-04ba-4708-8b8f-de9e36bb88ce
Price-gouging tactic used by private health insurers must end | Australian Medical Association
Cited text: Regulatory loopholes must be closed to put an end to private health insurance product ‘phoenixing’ — a sneaky tactic used by insurers to price gouge n...
Excerpt: The Australian Medical Association has thrown its considerable weight behind plans to outlaw this deceptive practice, which involves insurers closing an existing product offering before opening an almost identical one at a higher price…
https://www.ama.com.au/media/price-gouging-tactic-used-private-health-insurers-must-end
End Price-Gouging by Private Health Insurers | Mirage News
Cited text: Regulatory loopholes must be closed to put an end to private health insurance product 'phoenixing' — a sneaky tactic used by insurers to pri...
Excerpt: The Australian Medical Association has thrown its considerable weight behind plans to outlaw this deceptive practice, which involves insurers closing an existing product offering before opening an almost identical one at a higher price…
https://www.miragenews.com/end-price-gouging-by-private-health-insurers-1558588/
Price-gouging tactic used by private health insurers must end | Australian Medical Association
Cited text: The Australian Medical Association welcomes proposed amendments to legislation to outlaw this deceptive practice, which involves insurers closing an e...
Excerpt: Phoenixing occurs when insurers close an existing product offering before opening an almost identical one at a higher price outside the regulated premium round process.
https://www.ama.com.au/media/price-gouging-tactic-used-private-health-insurers-must-end
Hidden health insurance hikes spark doctor backlash | YourLifeChoices
Cited text: No, it’s not a new yoga pose or a mythical bird—phoenixing is when health insurers scrap an existing policy and relaunch it under a shiny new name, of...
Excerpt: It's when health insurers scrap an existing policy and relaunch it under a shiny new name, often with a hefty price hike attached.
https://www.yourlifechoices.com.au/health/hidden-health-insurance-hikes-spark-doctor-backlash/
Health Minister Mark Butler threatens crackdown on ‘sneaky’ private insurance firms for price-gouging | The Nightly
Cited text: His warning followed an investigation by Commonwealth Ombudsman Iain Anderson that found private insurers are charging new customers more, applying se...
Excerpt: An investigation by Commonwealth Ombudsman Iain Anderson found private insurers are charging new customers more, applying secret premium increases above what is allowed under the annual premium review process by closing and reopening…
https://thenightly.com.au/politics/...-on-sneaky-private-insurance-firms-c-17022732
Health Minister Mark Butler threatens crackdown on ‘sneaky’ private insurance firms for price-gouging | The Nightly
Cited text: The secret premium increase, dubbed “product phoenixing”, means new customers taking out Gold tier policies are paying hundreds of dollars more than e...
Excerpt: This means new customers taking out Gold tier policies are paying hundreds of dollars more than existing customers each year.
https://thenightly.com.au/politics/...-on-sneaky-private-insurance-firms-c-17022732
Hidden health insurance hikes spark doctor backlash | YourLifeChoices
Cited text: Consumer advocacy group CHOICE found that some insurers had increased prices by up to 47 per cent over three years through this loophole.
Excerpt: Consumer advocacy group CHOICE found that some insurers had increased prices by up to 47 per cent over three years through this loophole.
https://www.yourlifechoices.com.au/health/hidden-health-insurance-hikes-spark-doctor-backlash/
Insurer profits soar as dodgy tactics persist | Australian Private Hospitals Association—the peak industry body representing and advocating for the private hospital and day surgery sector in Australia
Cited text: "The CHOICE report shows that over the past four years, despite average premiums rising by an approved 11.9 per cent, health insurer 'phoenixing...
Excerpt: Despite average premiums rising by an approved 11.9 per cent over four years, health insurer phoenixing jacked up the average price of Gold cover by 45 per cent.
https://www.apha.org.au/read/2915/insurer-profits-soar-as-dodgy-tactics.html
Insurer profits soar as dodgy tactics persist | Australian Private Hospitals Association—the peak industry body representing and advocating for the private hospital and day surgery sector in Australia
Cited text: 'The CHOICE report shows that over the past four years, despite average premiums rising by an approved 11.9 per cent, health insurer 'phoenixing' jacked up th...
Excerpt: Despite average premiums rising by an approved 11.9 per cent over four years, health insurer phoenixing jacked up the average price of Gold cover by 45 per cent.
https://www.apha.org.au/read/2915/insurer-profits-soar-as-dodgy-tactics.html
Health Minister Mark Butler threatens crackdown on ‘sneaky’ private insurance firms for price-gouging | The Nightly
Cited text: For examples, in 2021, a family in NSW paid on average $5380 for a Gold hospital policy, with a $750 excess, per year.
Excerpt: in 2021, a family in NSW paid on average $5380 for a Gold hospital policy with a $750 excess per year.
https://thenightly.com.au/politics/...-on-sneaky-private-insurance-firms-c-17022732
Hidden health insurance hikes spark doctor backlash | YourLifeChoices
Cited text: That’s a staggering jump, especially for retirees and older Australians who rely on private health cover ...
Excerpt: That's a staggering jump, especially for retirees and older Australians who rely on private health cover for peace of mind and timely care.
https://www.yourlifechoices.com.au/health/hidden-health-insurance-hikes-spark-doctor-backlash/
Hidden health insurance hikes spark doctor backlash | YourLifeChoices
Cited text: That’s a staggering jump, especially for retirees and older Australians who rely on private health cover for peace of mind and timely care.
Excerpt: That's a staggering jump, especially for retirees and older Australians who rely on private health cover for peace of mind and timely care.
https://www.yourlifechoices.com.au/health/hidden-health-insurance-hikes-spark-doctor-backlash/
Insurer profits soar as dodgy tactics persist | Australian Private Hospitals Association—the peak industry body representing and advocating for the private hospital and day surgery sector in Australia
Cited text: 'While families struggle with the cost-of-living crisis the health insurance industry has cleaned up with its second highest after-tax profit of $2.13...
Excerpt: The health insurance industry recorded its second highest after-tax profit of $2.13 billion, while also reaping $3.4 billion in higher management fees—that's $5.53 billion in just one year from the premiums Australians pay.
https://www.apha.org.au/read/2915/insurer-profits-soar-as-dodgy-tactics.html
Insurer profits soar as dodgy tactics persist | Australian Private Hospitals Association—the peak industry body representing and advocating for the private hospital and day surgery sector in Australia
Cited text: According to APRA, in 2024-25 the health insurance industry kept 16 per cent of customer premiums for themselves.
Excerpt: According to APRA, in 2024-25 the health insurance industry kept 16 per cent of customer premiums for themselves.
https://www.apha.org.au/read/2915/insurer-profits-soar-as-dodgy-tactics.html
Insurer profits soar as dodgy tactics persist | Australian Private Hospitals Association—the peak industry body representing and advocating for the private hospital and day surgery sector in Australia
Cited text: 'For example, Medibank's share of this growing gouge as Australia's biggest health insurer saw its operating profit soar to $741.5 million (2024-25), ...
Excerpt: Medibank's share of this growing gouge as Australia's biggest health insurer saw its operating profit soar to $741.5 million, up 7.1 per cent from the previous year, yet Medibank's benefits payout ratio was only 82.9 per cent.
https://www.apha.org.au/read/2915/insurer-profits-soar-as-dodgy-tactics.html
Insurer profits soar as dodgy tactics persist | Australian Private Hospitals Association—the peak industry body representing and advocating for the private hospital and day surgery sector in Australia
Cited text: 'Meanwhile private hospitals have been going backwards at the hands of insurers with annual funding shortfalls of over $1 billion a year for three str...
Excerpt: Private hospitals have been going backwards with annual funding shortfalls of over $1 billion a year for three straight years—the difference between what it costs hospitals to provide healthcare and what health insurance companies…
https://www.apha.org.au/read/2915/insurer-profits-soar-as-dodgy-tactics.html
Insurer profits soar as dodgy tactics persist | Australian Private Hospitals Association—the peak industry body representing and advocating for the private hospital and day surgery sector in Australia
Cited text: While some may be aware that the average premium increase awarded to insurers this year was 3.73 per cent, what they probably don't know is that the average i...
Excerpt: While some may be aware that the average premium increase awarded to insurers this year was 3.73 per cent, the average increases for the big end of town were much higher at 3.99 per cent for Medibank, 4.95 per cent for HCF, 5.1 per cent for BUPA, and 5.79 per cent for NIB.
https://www.apha.org.au/read/2915/insurer-profits-soar-as-dodgy-tactics.html
Insurer profits soar as dodgy tactics persist | Australian Private Hospitals Association—the peak industry body representing and advocating for the private hospital and day surgery sector in Australia
Cited text: Those are just the average increases for the big four insurers. Many of the policies they offer rose by 8-9 per cent.
Excerpt: While some may be aware that the average premium increase awarded to insurers this year was 3.73 per cent, the average increases for the big end of town were much higher at 3.99 per cent for Medibank, 4.95 per cent for HCF, 5.1 per cent for BUPA, and 5.79 per cent for NIB.
https://www.apha.org.au/read/2915/insurer-profits-soar-as-dodgy-tactics.html
Insurer profits soar as dodgy tactics persist | Australian Private Hospitals Association—the peak industry body representing and advocating for the private hospital and day surgery sector in Australia
Cited text: Given these four insurers capture about 75 per cent of the market, most families are paying way over the odds.
Excerpt: Given these four insurers capture about 75 per cent of the market, most families are paying way over the odds.
https://www.apha.org.au/read/2915/insurer-profits-soar-as-dodgy-tactics.html
Price-gouging tactic used by private health insurers must end | Australian Medical Association
Cited text: But unacceptable conduct from insurers threatens the integrity of our entire healthcare landscape.” · The AMA welcomes the federal government’s commit...
Excerpt: Health Minister Mark Butler described phoenixing as an 'underhanded' and 'sneaky' practice in December 2024.
https://www.ama.com.au/media/price-gouging-tactic-used-private-health-insurers-must-end
End Price-Gouging by Private Health Insurers | Mirage News
Cited text: The AMA welcomes the federal government's commitment to outlaw product phoenixing, which Health Minister Mark Butler described as an 'underhanded' and...
Excerpt: Health Minister Mark Butler described phoenixing as an 'underhanded' and 'sneaky' practice in December 2024.
https://www.miragenews.com/end-price-gouging-by-private-health-insurers-1558588/
Health Minister Mark Butler threatens crackdown on ‘sneaky’ private insurance firms for price-gouging | The Nightly
Cited text: “[It] is not strictly against the law but…it is clearly against the spirit of the law. It is an underhanded, largely secret way of health insurers rai...
Excerpt: Butler stated: 'It is not strictly against the law but...it is clearly against the spirit of the law.
https://thenightly.com.au/politics/...-on-sneaky-private-insurance-firms-c-17022732
Price-gouging tactic used by private health insurers must end | Australian Medical Association
Cited text: In a submission on the proposed amendments, the AMA supports changes that would force insurers to use only the annual premium round to seek approval f...
Excerpt: The AMA supports changes that would force insurers to use only the annual premium round to seek approval for the pricing of new products, unless in exceptional circumstances.
https://www.ama.com.au/media/price-gouging-tactic-used-private-health-insurers-must-end
End Price-Gouging by Private Health Insurers | Mirage News
Cited text: In a submission on the proposed amendments , the AMA supports changes that would force insurers to use only the annual premium round to seek approval ...
Excerpt: The AMA supports changes that would force insurers to use only the annual premium round to seek approval for the pricing of new products, unless in exceptional circumstances.
https://www.miragenews.com/end-price-gouging-by-private-health-insurers-1558588/
Price-gouging tactic used by private health insurers must end | Australian Medical Association
Cited text: The AMA argues those “exceptional circumstances” must be clearly defined in legislation to prevent any possibility of insurers finding loopholes to im...
Excerpt: the AMA argues those 'exceptional circumstances' must be clearly defined in legislation to prevent any possibility of insurers finding loopholes to implement product phoenixing.
https://www.ama.com.au/media/price-gouging-tactic-used-private-health-insurers-must-end
End Price-Gouging by Private Health Insurers | Mirage News
Cited text: The AMA argues those 'exceptional circumstances' must be clearly defined in legislation to prevent any possibility of insurers finding loopholes to im...
Excerpt: the AMA argues those 'exceptional circumstances' must be clearly defined in legislation to prevent any possibility of insurers finding loopholes to implement product phoenixing.
https://www.miragenews.com/end-price-gouging-by-private-health-insurers-1558588/
Price-gouging tactic used by private health insurers must end | Australian Medical Association
Cited text: “Private hospitals play a vital role, especially as more Australians seek care outside the overwhelmed public sector. But unacceptable conduct from in...
Excerpt: Private hospitals play a vital role, especially as more Australians seek care outside the overwhelmed public sector, but unacceptable conduct from insurers threatens the integrity of the entire healthcare landscape.
https://www.ama.com.au/media/price-gouging-tactic-used-private-health-insurers-must-end
Price-gouging tactic used by private health insurers must end | Australian Medical Association
Cited text: The AMA calls for serious penalties to apply for insurers that continue product phoenixing once legislative changes are implemented. “There are just a...
Excerpt: The AMA calls for serious penalties to apply for insurers that continue product phoenixing once legislative changes are implemented, stating 'There are just a few insurers that dominate the market in Australia, and given their…
https://www.ama.com.au/media/price-gouging-tactic-used-private-health-insurers-must-end
Health Minister Mark Butler threatens crackdown on ‘sneaky’ private insurance firms for price-gouging | The Nightly
Cited text: Mr Butler on Monday put insurance firms on notice that they risked being named and shamed or faced tougher legislation to stop unfair premium hikes if...
Excerpt: Health Minister Butler has put insurance firms on notice that they risked being named and shamed or faced tougher legislation to stop unfair premium hikes if they did not 'do the right thing' by consumers.
https://thenightly.com.au/politics/...-on-sneaky-private-insurance-firms-c-17022732
Hidden health insurance hikes spark doctor backlash | YourLifeChoices
Cited text: First, check your policy documents and premium notices closely.
Excerpt: Check your policy documents and premium notices closely.
https://www.yourlifechoices.com.au/health/hidden-health-insurance-hikes-spark-doctor-backlash/
Insurers pricing out Australians from quality private health insurance—Catholic Health Australia
Cited text: “With over 25,000 health insurance products available, the landscape is increasingly complex and confusing for consumers.” · Recent government data de...
Excerpt: With over 25,000 health insurance products available, the landscape is increasingly complex and confusing for consumers.
https://cha.org.au/insurers-pricing-out-australians-from-quality-private-health-insurance/
PHI 75/25 attachments—2026 Private health insurance ...
Cited text: Further, I note the Government’s election commitment to legislate against product phoenixing.
Excerpt: The Government has committed to legislate against product phoenixing,
https://www.health.gov.au/sites/def...e-premium-round-statement-of-expectations.pdf
Health insurers face pressure to justify premium hikes | Insurance Business Australia
Cited text: The new approach comes as funds prepare their submissions for how much more than 15 million people could be asked to pay from April 1.
Excerpt: the new approach comes as funds prepare their submissions for how much more than 15 million people could be asked to pay from April 1.
https://www.insurancebusinessmag.co...pressure-to-justify-premium-hikes-550348.aspx
Health insurers face pressure to justify premium hikes | Insurance Business Australia
Cited text: Health Minister Mark Butler told insurers on Friday that his decision-making will now take into account “consumer value and market integrity,” marking...
Excerpt: Health Minister Mark Butler told insurers that his decision-making will now take into account 'consumer value and market integrity,' marking the first time such factors have been included in the approval process since it was introduced in…
https://www.insurancebusinessmag.co...pressure-to-justify-premium-hikes-550348.aspx
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