If you're looking at private health insurers on the ASX, you might want to take note of what Health Minister Mark Butler has to say on significantly higher price premiums set to kick in soon.

Minister Butler announced that private health insurance premiums will rise by an average 4.41 per cent from 1 April 2026, in one of the largest annual increases in recent years, after the Federal Government signed off on insurers’ revised submissions.

He added that the increase followed multiple rounds of negotiations with insurers and reflected rising costs across the health system.

The 4.41 per cent lift is higher than last year’s 3.73 per cent rise. It tracks a 5 per cent increase in the cost of medical and hospital services over the past financial year.

The minister issued figures revealing that in the 12 months to 30 September 2025, insurers paid out more than $26.7 billion in hospital, medical and extras benefits.

Hospital treatment benefits rose $1.2 billion to $20 billion, up 6 per cent. General treatment benefits increased $341 million to $6.7 billion, up 5 per cent. Hospital accommodation benefits per episode climbed 5 per cent, the strongest growth since the data series began in 2008.

The minister said wage pressures and the financial position of private hospitals also drove the premium outcome.

The hospital benefits ratio, which measures the share of premiums returned to members as hospital benefits, has risen to 85.9 per cent as at September 2025, up from 83 per cent in 2022–23. It is projected to reach 87 per cent in the year from 1 April 2026.

Pre-pandemic, the ratio sat around 90 per cent.

“This premium round has been guided by my commitment to maintain the value of private health insurance for Australians, while making sure the sector plays its part in supporting private hospitals facing rising costs and significant challenges,” Mr Butler said.

Mr Butler said premium increases must be supported by evidence and improve the broader system, not insurer balance sheets.

For households, the April rise compounds pressure from higher rents, mortgages and energy bills. For the private health sector, it reflects the continuing strain of rising wages, hospital costs and post-pandemic demand.

The larger question is whether lifting the hospital benefits ratio back towards 90 per cent is enough to stabilise private hospitals without triggering further premium pressure next year.

Keep an eye on the health insurance companies on the ASX. Medibank has been up over 14% over the last 12 months, while NIB has been up almost 7.5%.