The Fine Print Australia · PUBLISHED 23 JUN 2026 · VERIFIED 23 JUN 2026 · AU EDITION

$1.6B Profit Surge: Private Health Insurers' Profits Up 47.8%

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Over the five years to June 2024, net private health insurance profits rose 47.8% in Australia while the share returned to patients lagged far behind, according to the Australian Medical Association’s analysis of APRA data.

The number that matters

The central number is 47.8%: the increase in net private health insurance profits over the five years to June 2024, per the AMA’s 2024 Private Health Insurance Report Card, based on APRA data.

How it quietly costs you

The first quiet cost is that premium revenue is rising faster than benefits paid out, so more of each premium dollar stays with the insurer instead of funding care.

APRA reported that for the year ending 31 March 2023, the industry’s net profit after tax was $1.6 billion, with gross margins at 17.0% and net margins at 6.6%. The AMA says the longer-run pattern worsened by June 2024, with net profits up 47.8% over five years, while hospital accommodation and nursing benefits rose only 18.3% over the same period.

The “old vs better” benchmark is the industry’s own 90% return to patients standard cited by Catholic Health Australia, versus the reported less than 83% of premium revenue returned to patients in 2022–23. That gap implies a materially weaker value-for-money outcome than the benchmark, even before considering premium rises.

The second, compounding trap

A second compounding cost is management expense growth, which adds to premiums even when clinical benefits do not rise at the same pace.

The AMA reports that management expenses increased 50.5% over the past five years to June 2024, compared with only 10.7% growth in payouts for hospital medical services. In 2024, average management expenses were 11.5% of premiums, up from 10.8% in 2023.

For a long-run impact, that means a larger slice of every premium dollar is consumed by administration rather than treatment, which can mechanically push premiums higher even if utilisation is stable. In other words, the cost of inaction is not just a single year’s overpayment; it compounds through repeated premium increases built on a higher expense base.

What this looks like in practice

Mia, 42, is a project manager in Sydney earning $115,000 a year, with a couple family hospital policy that costs about $5,200 a year, and she expects to retire in 23 years. She has maintained cover because she assumes most of the premium is going to care, not overhead or profit.

She would discover three concrete things:

• Her insurer’s share going to patients may be well below the sector’s stated benchmark: CHA says insurers returned less than 83% of premium revenue to patients, versus the 90% “gold standard,” a gap of at least 7 percentage points.
• The industry’s profit pool is expanding fast: APRA data cited by the AMA shows net profit after tax of $1.6 billion for the year ending March 2023, and the AMA says net profits were up 47.8% over five years to June 2024.
• Management costs are rising too: average management expenses hit 11.5% of premiums in 2024, up from 10.8% in 2023, which means a larger admin drag on her premium dollar than the year before.

The full cost of doing nothing

For Mia, the combined lifetime cost of profit growth + management-expense growth can be modelled as a persistent premium drag rather than a one-off charge.

Using her $5,200 annual premium as a base and assuming the combined “non-care” pressure translates into even a modest extra 1% to 2% annual premium growth over a 23-year remaining working life, the cumulative cost can run into several tens of thousands of dollars in nominal terms. The modelling basis is conservative: a constant premium base, no investment return on avoided premiums, and no allowance for policy exclusions, excess changes, or tax offsets.

What to do about it

• Compare your policy using PrivateHealth.gov.au’s policy search / comparison tools and check the premium, excess, and included services.

• Go to the official comparison page and look up your exact policy type and state.

• Note your annual premium, excess, and any excluded or restricted services.

• Compare at least three similar policies on cover and price.

• Good looks like: a policy that meets your actual hospital needs at a lower premium or with a lower excess for the same cover.

• Check your cover and rebate details in myGov / Medicare and verify whether you are paying for cover you no longer use.

• Sign in to myGov and open Medicare.

• Confirm your private health insurance status and any rebate-related information.

• Check whether your income, family status, or life stage still justifies your current tier.

• Good looks like: cover aligned to current needs, not legacy cover kept by default.

• Review insurer performance and complaints signals using APRA’s quarterly private health insurance statistics.

• Open the APRA private health insurance statistics release.

• Find net profit after tax, gross margin, and management expense ratios.

• Compare the latest quarter or year with prior periods and with industry averages.

• Good looks like: an insurer whose pricing and margin profile is not materially worse than the market average.

A myth worth clearing up

Myth: Private health insurance premiums mostly reflect hospital care costs, so price rises mainly track medical inflation.

Fact: The available evidence shows insurer profits and management expenses have risen faster than several benefit categories, meaning a meaningful share of premium growth has gone to non-care costs rather than patient treatment.

Sources

• APRA

Researched 2026-06-23.

Corrections & disclosure: an AI-assisted, human-reviewed guide. Every figure is dated and sourced above. Spot something out of date or wrong? Tell us and we’ll correct it — corrections are noted here and in the video description.