Private health insurance premiums are set to jump by another 5.59 percent on average from April, costing families an extra $200 per year, but the Federal Government concedes the costs could have been much higher.
Sharp increases over 14 years mean that a policy that once cost $2000 will now cost families $4840.
Premiums will increase an average of 5.59 per cent from April 1, down from almost 6.2 per cent last year.
Medibank will hike its prices by an average of 5.64 per cent, CUA by almost nine per cent.
The increase is more than three times the rate of inflation, with experts concerned it will encourage Australians to drop their private health insurance altogether.
Health Minister Sussan Ley acknowledged the health insurance premium increase is 'hard on the household' but said the government is 'committed to taking the pressure off price rises for consumers through sensible and balanced reforms'.
Ms Ley said 20 health funds had resubmitted a lower increase, with some cutting back as much as 1.5 per cent, easing costs for more than 93 per cent of Australians with private health cover.
Families and couples with a combined hospital and general treatment policy will on average save up to $166 while singles will save up to $83 when compared with the original premium requests by insurers for 2016.
Ms Ley said Wednesday's announcement was the first step in a broader overhaul of private health insurance, in a bid to deliver lasting savings for consumers.
The approach seeks to make sure private health insurers are required to pay for medical devices like pacemakers, with savings expected to begin flowing to consumers from next year.
Under existing rules, a pacemaker for a private patient can cost the insurer $43,000 compared with $17,000 if they were treated as a public patient, which drives premiums higher.
PREMIUM INCREASES BY THE BIGGEST FUNDS IN 2016
Medibank - 5.64pct an increase of 5.64% (6.59pct)
Bupa - 5.69pct an increase of 5.69% (6.50pct).
HCF - 5.42pct an increase of 5.42% (6.50pct).
NIB - 5.55pct an increase of 5.55% (6.55pct).
HBF - 4.94pct an increase of 4.94% (5.96pct).
Industry average - 5.59pct will increase from 6.18pct.
The biggest jump will be for the 58,000 members of CUA Health, at 8.95%.
