Going for gold – What’s Really Happening to Gold Health Insurance in Australia

Australia has a first-rate health system, the envy of the rest of the world. It works so well because of its hybrid nature: the government-funded Medicare system enhanced by world-leading private health insurance in Australia (PHI). This patient-first model ensures high-quality healthcare services and treatment are near universally available.

But there is a major crisis looming in private health insurance in Australia which may undermine this success. Data released by the Australian Department of Health, Disability and Ageing shows a significant shift away from comprehensive Gold private health insurance towards lower levels of cover – Silver, Bronze and Basic – offering much less coverage.

The numbers don’t lie. Since 2019, the proportion of insured Australians choosing Gold hospital cover has fallen from 55 per cent to a historic low of just 31 per cent.

That is a 24 per cent drop in six years and represents far more than a market correction – it signals a systemic change with serious consequences for affordability, fairness and the long-term sustainability of Australia’s healthcare system.

Left unchecked, this exodus from Gold private health insurance threatens the foundations of our health system.

This is why, Gold cover is unique. It is the only level of hospital insurance that includes all 38 government-mandated clinical categories without restriction.

This guarantees access to essential services such as palliative care, psychiatric hospital services, rehabilitation, maternity care, assisted reproductive services (including IVF), joint replacements, cataract surgery and kidney dialysis, all fully included under Gold hospital cover.

As Australia’s population ages and demand for hospital services increases, it will be vital to ensure our private health system remains fit for purpose. That can only happen if Gold private health insurance remains vibrant and popular and well-used; not the niche system that it is in danger of becoming.

Lower levels of cover may appear cheaper, but they come with trade-offs. When healthier Australians leave Gold cover, premiums rise for those who need it most.

Since July 2019, the average monthly premium for an individual Gold policy has increased by $128 – from around $231 to almost $360 – a 55 per cent rise.

Government cuts to the health insurance rebate have worsened the problem. For most Australians, the rebate now sits at just 24.6 per cent. Combined with rising cost of living pressures, this is pushing people to downgrade their cover – or drop it all-together.

The consequences of this Gold exodus are profound.

Firstly, it weakens the fundamental principle of community rating and fairness. Under a community rated private health system, access to cover should always cost the same irrespective of a person’s age, health condition or gender.

Secondly, every Australian covered by private health insurance, particularly at the Gold level, lessens the burden on our public hospitals. If fewer people hold comprehensive Gold cover, more will inevitably turn to our already overburdened public health system

Thirdly, for those Australians who genuinely need Gold hospital cover, such as families planning a pregnancy or people requiring complex procedures like hip replacements, the costs are escalating.

The situation is so dire that Gold cover could enter a death spiral of ever-increasing cost, making it unaffordable. Is this what we want: a two-tiered system within private health where some procedures are only available for the rich?

The private health system is responsible for over 60 percent of all procedures and is of fundamental importance to the wellbeing of society and broader economy.

Table 1 : Decline in Gold Hospital Treatment Policies (Australia)

Source: Department of Health, Disability and Ageing’s private health insurance reform data quarterly trend report, December 2024.

Table 2 : Average price for one adult with comprehensive Gold cover (Australia) 2019 to 2025

Source: Sourced by Finity Actuaries on 21 July 2025