Money.com.au Health Insurance research & insights

Millions of Australians with health insurance risk losing thousands of dollars in unused extras benefits when annual limits expire on December 31.

Most health funds reset their extras benefit limits at the start of the New Year (on January 1), meaning the 15 million Australians with extras or combined health insurance have only weeks left to use their annual allowances for dental, optical, physio and other treatments.

The latest research from Money.com.au reveals two in five Aussies with health insurance (40%) don’t know if they have any unused extras left on their policy.

Meanwhile, 31% used some extras but still have benefits left before they expire, and 15% admit they’ve used none or very little of their annual limits. Only 14% of Australians have used their full entitlements this year.

All extras policies have annual limits — the maximum amount you can claim on a specific service or treatment each year — and once that limit resets, any unused portion is lost. For example, if your dental limit is $1,800 and you’ve only claimed $800 this year, the remaining $1,000 disappears when your policy resets.

Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says Australians underestimate how much value they lose by not keeping track of their extras annual limits.

“Australians are effectively walking away from thousands of dollars in value every year. Depending on your policy, extras limits can range from $200 to $1,800 for services like general dental. Many people don’t realise those benefits vanish overnight on December 31. It’s a classic ‘use it or lose it’ scenario,” he says.

“If you're due for a visit, use the next few weeks to book a dental clean, renew your glasses or lock in that one last physio appointment before your extras reset. Appointment books fill up quickly in December, so securing those final bookings now can make a big difference.”

“You can check your claims history through your insurer’s app or online member portal. If you’re still unsure, contact your fund directly and they’ll be able to provide your full claims history for the calendar year. Ideally, you want to use as much of the extras benefits you pay for all year through your premiums. And if you consistently underuse your benefits, it may be worth switching to a policy with lower annual limits.”

Older Aussies most unsure about their health insurance extras, but younger Aussies underuse them the most

The survey found that uncertainty is more prevalent among older Australians, with 45% of Baby Boomers unsure whether they have unused extras remaining. The same is true of 41% of Gen X and 27% of Millennials.

“What we see is that older generations tend to claim when something breaks or hurts, not to maximise their extras value. This means they’re less aware of their annual limits,” says Chris.

However, younger Australians are the most likely to have used none or very little of their extras this year, with 19% of Millennials reporting minimal use, compared with 13% of Gen X and 11% of Baby Boomers.

When do health funds reset extras benefits?

The majority of Australian health funds have extras benefits that expire on December 31 and reset on January 1. This includes the ‘Big Five’ of Medibank, Bupa, HCF, HBF and NIB.

Some insurers instead reset their annual limits at the end of the financial year (June 30), with benefits renewing on July 1. A smaller number of health funds offer policies where extras limits reset on the policy anniversary date.

Select funds do offer rollover features, but they’re the exception, not the rule, and only apply to specific services like general dental or optical. Most Australians won’t be able to carry their benefits into the New Year.

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New analysis from Money.com.au shows next year’s private health insurance premium increase could sit between 3.9% and 4.4%. (See chart below).

Data shows that although premium increases have sat below health inflation since 2021, the gap has been steadily closing. If health inflation stays near the 4% mark this year, the 2026 premium hike could fall in line with, or even surpass health price inflation.

A 3.9%–4.4% premium rise would see singles on a combined hospital and extras policy pay an extra $127–$144 a year, while families would face an additional $191–$216 annually. These estimates are based on the average combined single policy costing $3,264 a year and the average combined family policy costing $4,908 a year.

Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says the return of stronger premium increases will be felt by millions of policyholders.

“What we’re seeing is a reset. Premium increases stayed unusually low for years, and 2026 may be the year they return to a more ‘normal’, but still painful, growth cycle. There’s no doubt that a premium increase of around 4% would be a shock for many policyholders, especially after a few years of softer rises,” he says.

“If you’re a policyholder, now’s the time to look at your policy and inclusions, and reassess whether you’re getting value for money as premiums rise. In my experience, there’s almost always a cheaper or better policy available when you take the time to shop around.”

The Minister has the final say on the industry-average premium increase, which is announced ahead of the 1 April adjustment each year.

While the Government approves a single industry-wide average, individual insurers can apply higher or lower increases, meaning some Australians may see rises well above the headline figure, while others may face smaller adjustments.

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New research from Money.com.au reveals that Australians with private health insurance have held their cover for an average of 10 years, yet almost half (46%) have never switched health funds.

The research found a third of policyholders (33%) have switched health insurance only once since first taking out their cover, while 16% have switched two or three times. Just 5% say they’ve switched four or more times since being insured.

Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says Australians aren’t shopping around regularly enough to get better value from their health cover.

“Premiums rise annually, yet many Australians continue with the same fund or cover tier year after year. As a result, they’re often paying too much for their policy or for cover that no longer suits their lifestage, and in many cases, both. For example, we’ve seen instances where policyholders were still paying for pregnancy benefits well after they’d finished having children,” he says.

“In many ways, your health is your biggest asset, so you should treat health insurance like any other financial product. You should be comparing policies every 12 months to make sure you’re still getting a competitive deal on your current cover or switch to a health fund that will give you one.”

Younger Australians the least likely to switch health funds

Gen Z are the most likely to have never switched health funds, with 58% saying they’ve stayed with the same provider since taking out their policy, though they’ve only held cover for an average of six years. In comparison, 48% of Millennials haven’t switched funds after an average of seven years of cover, while 44% of Gen X remain with the same fund after around 11 years. Baby Boomers are the most seasoned policyholders, holding cover for an average of 13 years, with 42% saying they’ve never switched.

“It’s expected that older Australians have held their health cover for longer, but what’s concerning is how few review or switch their policy as their circumstances change. Your cover should evolve with your life — whether that’s starting a family, retiring, or managing new health needs,” says Chris.

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New research from Money.com.au reveals the types of insurance Australians use most frequently — and surprisingly, it’s not the ones protecting their biggest assets.

Gen X (51%) and Millennials (48%) were the most likely to rely on private health cover for mental health care, compared with 44% of Baby Boomers and just 32% of Gen Z.

Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says there is rising demand for mental health care and growing interest in how insurance can help meet it.

“We’re seeing a rise in inquiries, particularly about which levels of extras cover offer benefits for mental health services like psychology, counselling and other therapies. It’s a sign that Australians increasingly see mental health as part of everyday wellbeing, not just something to address in a crisis,” he says.

“Younger Australians are often on basic extras or hospital policies to keep premiums affordable, but these policies typically don’t include benefits for mental health services. Yet, they’re the group most likely to need flexible mental health support while juggling study, work and life changes.”

“The research also found that 55% of Australians who used a mental health service in the past 12 months didn’t have private health insurance, which could be putting pressure on public mental health services and further extending wait times for patients.”

According to APRA data, the number of psychology and group-therapy services provided outside hospitals to Australians with private health insurance has nearly doubled since 2020.

One in five Australians avoid mental health care due to cost

Among Australians who didn’t access mental health services at all in the past year, one in five (20%) said cost was the main barrier, while 80% said they didn’t need care.

Gen Z were the most likely to say cost kept them from seeking mental health services, with 35% citing it as a barrier, well above Millennials (24%), Gen X (29%) and Baby Boomers (13%).

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New research by Money.com.au reveals more than half of Australians with private health insurance (59%) check customer reviews before choosing or switching to a health fund.

Among them, a quarter of policyholders (25%) say they always check customer reviews before signing up with any new health insurer, while a third (34%) only research customer feedback if they haven’t heard of the fund before.

How important is customer feedback when choosing a health fund?

Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says customer reviews give real insight into members’ experiences with claims, service and value for money.

“On paper, two health funds can look almost identical in price and cover. Customer reviews give you a glimpse of how a fund performs when it comes time to make a claim. Do they pay claims quickly, treat members fairly, or leave you stuck in red tape, as we know happens with some health funds,” he says.

“These are areas that can make a big difference when you actually need to use your cover, which is on average twice a year for hospital cover and five times for extras. We’ve seen customers choose a health fund with slightly higher premiums because reviews showed claims were processed faster and service was more reliable than other funds.”

“This trend is catching on. Over the years, we’ve seen health insurers like AIA Health Insurance, RT Health and Phoenix Health Fund promote their high customer ratings in advertising because they know Australians are paying attention. Positive reviews and strong satisfaction scores have become a competitive edge in the health insurance space.”

The survey found that one in four Australians with private health insurance (25%) stick with their fund out of habit, while 17% rely on comparison sites or word of mouth when choosing a fund.

Young Aussies lead the way in checking health fund reviews

When it comes to choosing a health fund, younger Australians are far more likely to do their homework. The survey found that three-quarters of Millennials (75%) and 70% of Gen Z check customer reviews before signing up or switching health cover. By contrast, review-checking drops to 62% for Gen X and just 37% for Baby Boomers.

In contrast, older Australians are more likely to turn to word of mouth or comparison sites rather than real customer feedback. The survey found that one in five Gen X (20%) and 19% of Baby Boomers rely on these sources when choosing a health fund, compared with just 14% of Millennials and 11% of Gen Z.

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New research from Money.com.au reveals that 17% of Australians with private health insurance — equivalent to 2.4 million people — have increased their excess in the past year to reduce their premiums.

In comparison, the nationally representative survey found that the majority of health insurance policyholders (72%) have kept their excess the same. Meanwhile, 10% of Aussies with private health cover didn’t know they could request to change their excess.

Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says Australians need to weigh up the trade-off between premium savings and potential out-of-pocket costs when deciding whether to raise their excess.

“If you’re looking to reduce your health insurance costs, the first port of call is to increase your excess. It’s the quickest way to bring down your monthly premium without downgrading or bumping off your cover altogether,” he says.

“Run a cost benefit analysis before changing your excess. Consider how much you use your cover, how many people are on the policy, and the types of benefits you’re likely to claim. For young singles who rarely go to hospital, a higher excess can be a no-brainer. For families with children who may be in and out of hospital or the dentist more often, a higher excess could mean paying more out of pocket when you claim. The savings on premiums may not stack up.”

How much can you save on premiums by increasing your health cover excess?

For a single policy, the average monthly premium with a $250 excess is $350. Lifting the excess to $500 reduces the monthly premium to $290 — saving $60 a month ($720 a year). A $750 excess brings it down further to $262, saving $88 a month ($1,056 a year) compared with a $250 excess.

For a family policy, the average monthly premium with a $250 excess is $438. Increasing the excess to $500 reduces the monthly premium to $384 — saving $54 a month ($648 a year). With a $750 excess, premiums drop to $371, saving $67 a month ($804 a year) compared with a $250 excess.

Gen Z lead the way in cutting health insurance costs by raising their excess

The survey found that Gen Z (30%) were the most likely of any generation to increase their health insurance excess to reduce premiums. They were followed by Millennials (21%), Gen X (14%), and Baby Boomers (9%).

Meanwhile, Gen X were the most likely to have kept their excess the same (79%), closely followed by Baby Boomers (78%), Millennials (70%), and Gen Z (57%).

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New research by Money.com.au reveals that 48% of parents with adult children on their family health insurance pay the full premium without asking for a contribution.

Meanwhile, 30% of parents say their adult children chip in some money toward the family policy. Only 22% say their adult dependants cover the entire cost of their portion of the family policy.

Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says there’s a trend of young Australians staying on their parents’ private health cover well into their twenties.

"The Bank of Mum and Dad is paying to keep them insured, which can save young adults money in the short term. The alternative is that they would forfeit cover entirely, as it can be cost-prohibitive for them to take out their own policy if they’re on a low income or just starting their career,” he says.

“But, once those adult children have a steady income, it’s time to have the conversation about contributing, even partially, to the family policy. They should also consider taking out their own cover if they earn above the Medicare Levy Surcharge threshold of $101,000 for singles, otherwise they’ll pay the surcharge through their tax.”

Most health funds allow adult dependants aged 21 to 31 to be added to a family policy, although this typically increases premiums. Adult dependants who are studying may be covered for free if they’re not married, living with a partner, or in a de facto relationship.

Adult dependants drive up health insurance costs by 25%

The average cost of a family policy with child dependants (under 21) is $4,808 per year (before any government discounts or rebates), based on Money.com.au’s analysis of extras-only, hospital-only and combined policies.

With an adult dependant (over 21 and not studying), the average cost of a family policy jumps to $6,016 — around 25% higher.

Gen Z most likely to let parents pay full health cover bill

The survey found that Gen Z were the most likely to let their parents pay the full cost of the family cover without contributing to their share (29%), followed by Millennials at 26%.

Among Gen Z, 45% contribute partially to the cost of being on their parents’ family cover, while 27% pay their full share. For Millennials, 32% contribute partially to the cost of being on their parents’ family cover, while 42% cover their share in full.

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New research from Money.com.au reveals that nearly half of Australians with extras cover (49%) stay loyal to their dentist — even if it means missing out on no-gap dental benefits available to them.

The nationally representative survey found that only a quarter of extras insurance policyholders (25%) have switched to a no-gap dentist to avoid out-of-pocket fees. Meanwhile, 13% of Aussies said their policy doesn’t include no-gap dental, and 12% don’t know whether their policy includes it.

No-gap dental is a feature of many extras policies that allows policyholders to access fully covered preventative dental treatments — like check-ups, scale and cleans — at select providers with no out-of-pocket costs.

Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says Australians are paying more for dental treatment than they need to.

“Dental is the most-used extras benefit, but it also has the highest out-of-pocket costs of any general treatment, with patients collectively paying around $800 million in gap fees so far this year. It’s surprising that so many Australians still choose to pay out of pocket, whether out of loyalty to their dentist or simple complacency,” he says.

“No-gap dental is becoming standard on many mid-tier and comprehensive extras policies, but it usually means going to a participating provider. Some of these policies even include two free check-ups per financial year, so if your extras cover doesn’t include no-gap dental, you could be leaving money on the table.”

How much you could save with no-gap dental

According to the latest APRA statistics, the average fee for a dental service for patients with private health insurance is $132.74, but health funds only cover $70.35 on average — leaving insured patients to pay a gap of $62.39 per visit.

So, if you visit the dentist twice a year, you could potentially save $124.78 annually by using a no-gap dental provider.

For a family of four, that adds up to $499.12 in potential yearly savings.

Which generation is missing out on no-gap dental savings?

The survey found that Baby Boomers were the most likely to stick with their usual dentist despite potential out-of-pocket costs (56%), followed by Gen Z (49%) and Gen X (47%). Millennials were the least likely to do so, at just 45%.

Gen Z were the most likely generation to be unsure whether their extras policy includes no-gap dental (17%), while Baby Boomers were the most likely to say their policy doesn’t include it (also 17%).

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New research from Money.com.au reveals Australians rank health insurance as the type of cover that saves them the most money overall — more than any other form of insurance.

The nationally representative survey found that one in five Aussies (20%) ranked extras cover as offering the best return on investment of all insurance types, followed by hospital insurance at 19%.

Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says there’s a shift in how Australians view the practicality of their health cover.

“Australians are placing increasing value on the day-to-day savings extras policies offer because you’re generally more likely to claim on dental, physio, optical and other allied health services than you are on hospital treatments,” he says.

“On average, extras policyholders make around five claims per year, while those with hospital cover average two claims annually. It highlights the importance of choosing a policy that matches your actual usage. Many Australians could be saving more by reviewing what benefits they’re eligible for and whether they’re making full use of them.”

Meanwhile, only 10% of Australians surveyed said car insurance and life/income protection insurance saved them the most money, while 7% said the same about travel insurance. Home and contents insurance ranked lowest, with just 4% of Aussies saying it’s saved them the most money.

Which insurance offers Aussies the most peace of mind?

When Australians were asked which types of insurance give them the most peace of mind, home and contents (88%), life insurance (80%), and travel insurance (79%) ranked highest.

Money.com.au’s Finance Expert, Sean Callery, says some Australians view value through usage, while others see it through peace of mind.

“With insurance types like car, home, life or travel, the goal is to have them and never need to use them. They may not feel useful day-to-day, but they’re crucial in high-risk or emergency situations,” he says.

“It shows that while these policies might not deliver a financial return through regular use — like extras cover does — they offer reassurance and the potential for critical support when it really matters.”

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New research from Money.com.au reveals families are the most likely to avoid using their private hospital insurance due to high out-of-pocket costs and the least likely to use it when they need care.

The survey found that nearly one in four families on a hospital policy (23%) have avoided using their cover because gap fees were too expensive — the highest of any policy type. This compares to 17% of couples and 15% of singles who did the same.

Family policyholders were also the least likely to use their cover when needed. Just 43% follow through with a claim when they need treatment, compared to 44% of singles and 64% of couples.

Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says families are often disproportionately affected by rising gap fees.

“Families typically have more people on their policy and as a result, more opportunities for hospital claims, whether it’s childbirth, tonsil removals, or sporting injuries. That means more exposure to gap fees, and higher out-of-pocket costs over time compared to singles or couples with cover,” he says.

“There’s a real risk that families will delay or avoid essential treatment just to dodge bill shock, which completely defeats the purpose of having hospital insurance in the first place. But there are ways to reduce gap fees if you understand how the system works, including taking advantage of no-gap schemes and providers.”

Singles most likely to avoid hospital claims due to confusion

The survey found that singles (20%) were the most likely to avoid claiming on their hospital insurance because they weren’t sure what was covered and didn’t want to be hit with unexpected costs. That’s compared to just 12% of family policyholders and 9% of couples.

Meanwhile, 22% of both singles and families said they’ve never needed to make a hospital claim, compared to just 10% of couples.

How to reduce out-of-pocket costs for families with hospital cover

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New research from Money.com.au reveals that the majority of Australians with hospital insurance are using it at least once a year — with an average of two claims annually.

The nationally representative survey of more than 1,000 Australians found that half of hospital cover policyholders (51%) make 1–2 claims per year, 10% make 3–5 claims, and 7% claim six or more times annually.

Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says Australians aren’t just paying premiums, they’re putting their cover to use.

“Hospital insurance is a lifeline when health issues arise and thankfully, the numbers show Australians are using that lifeline. The fact that the average policyholder claims twice a year proves it’s far from a wasted expense, especially considering some surgeries and hospital treatments cost thousands of dollars,” he says.

“The most common services people claim for are elective surgeries and overnight hospital stays. Even if they originally took out a policy just to avoid the Medicare Levy Surcharge, they’re relying on it when it really counts and that’s exactly what it’s there for.”

The survey also found that one in five Australians (21%) rank hospital cover as their most essential form of insurance — and of those, 19% said it’s because it has saved them the most money.

However, nearly a third of policyholders (31%) said they’ve never claimed on their hospital cover.

Older Aussies more likely to use their hospital insurance regularly — and least likely to let it go unused

The survey found older generations are more likely to use their hospital cover regularly. For example, 68% of Baby Boomers and 47% of Gen X claim on their policy 1–2 times per year, compared to just 43% of Millennials and 39% of Gen Z.

Baby Boomers are also the least likely to leave their hospital cover unused, with only 20% saying they’ve never made a claim — compared to 40% of Gen X, 36% of Millennials, and 30% of Gen Z.

Whitelaw says older Australians are more likely to use hospital cover for actual healthcare needs, while younger Aussies may be holding policies for peace of mind or tax reasons — but not necessarily relying on them as often.

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Singles are leaving hundreds of dollars on the table by underusing their health insurance extras cover, compared to couples and families, new research from Money.com.au reveals.

The survey found that a higher proportion of Aussies on a single policy claim only 1–2 times per year on their extras cover (40%) — meaning two in five singles are paying for benefits they rarely use. In contrast, just 20% of those on a couples policy and 31% on a family policy claim only 1–2 times per year.

Money.com.au’s General Manager of Health Insurance, Chris Whitelaw, says there’s a growing gap between singles and those on couples or family policies when it comes to getting value from their extras cover.

“It’s natural for couples and families to claim more frequently on their extras cover — more people on a policy means more people needing general or ancillary treatments, whether that’s dental visits, physio appointments or optical check-ups. Someone on a single policy may naturally claim less, but if they’re only claiming once or twice a year, hypothetically for their bi-annual dental check-up, it means they’re still paying for dozens of benefits they’re not using,” he says.

“When it’s just you on a policy, there are fewer opportunities to claim — but you’re still paying for a full suite of extras. That’s where the singles cover trap kicks in: many singles are forking out for benefits they barely use, leaving hundreds of dollars on the table every year.”

How often should singles claim on their health insurance extras?

Whitelaw says single policyholders claim on average three times a year on their extras cover, typically for common services like an annual dental check-up, optical needs, or occasional physio.

The survey found that more than a quarter of single policyholders (26%) claim on their extras 3–5 times per year, while 16% claim 6–10 times per year, and only 9% claim more than 10 times per year. A small percentage (9%) say they never claim on their health insurance extras.

Couples squeeze the most value out of their health insurance extras

The research reveals that families have the highest proportion claiming 3–5 times per year (33%), followed closely by couples (31%).

However, couples are more likely to claim at higher frequencies, with 26% claiming 6–10 times annually compared to 19% of families. Couples also lead in the highest usage bracket, with 17% claiming more than 10 times per year, versus just 9% of families.

Additionally, couples have fewer non-claimers — only 6% say they haven’t made a claim at all, compared to 8% of families.

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