Health insurer nib is lifting its premiums by an average of almost eight per cent.
Chief executive March Fitzgibbon said the 7.99 per cent increase was needed to keep up with the rising cost of providing health care.
The insurer paid out more than $1 billion in benefits to customers in the 2012/13 financial year, up more than 10 per cent on the previous year, he said.
The company has more than 470,000 Australian policy holders.
"While every effort has been made to keep premium increases as low as possible, rising medical and health care costs as well as customer utilisation means we need to increase premiums to maintain the level of health cover and benefits our customers have come to expect," Mr Fitzgibbon said.
Federal Health Minister Peter Dutton has given approval for a rise in nib's premiums across all products by an average of 7.99 per cent, which will take effect from April 2014.
Shares in nib jumped 6.0 cents, or 2.5 per cent, to $2.50.
The company said another factor in the premium hike was its risk equalisation liability, a system Mr Fitzgibbon said required all health insurers to share the costs associated with older and chronically ill Australians.
Mr Dutton on Monday approved health insurance premium increases across the board from April. The move means the cost of health insurance will rise, on average, by $3.86 a week, based on a basic combined family policy.
