Key Takeaways
Health insurance premiums rising in NZ has become one of the biggest money worries for households, and more people are cancelling as a result. Before you drop your health cover, it helps to understand why prices are climbing and what you can change to bring the cost down.
- Premiums have risen almost 75% over five years, driven by rising claims costs and medical inflation.
- The average claim paid per member nearly doubled, from $1,097 in 2021 to $1,921 in 2025.
- 9% of health insurance holders cancelled cover in 2025, up from 7% in 2022.
- Raising your excess, trimming extras and keeping core surgical cover can reduce the premium without cancelling.
- Cancelling and reapplying later can mean new exclusions for conditions that developed in the gap.
Why are health insurance premiums rising in NZ?
Health insurance premiums rising in NZ is not a one-off. Several pressures are pushing costs up at the same time, and premiums follow the cost of claims.
The cost of claims has climbed sharply
Research by MartinJenkins, commissioned by the Financial Services Council, found the average health insurance claim paid per member rose from $1,097 in 2021 to $1,921 in 2025. Premiums rose almost 75% over the same five-year period, as reported by Insurance Business NZ. When insurers pay out more for each member, the cost is spread across everyone through higher premiums.
Medical inflation runs ahead of general inflation
Surgery, hospital stays, specialist fees, scans and new treatments all cost more each year. New technology and medicines often improve outcomes but add to the bill. Aon has forecast New Zealand employee healthcare costs to rise 18% in 2026, well above its 9.8% global average, according to the same Insurance Business NZ report.
More people are using their cover
Public hospitals are working hard to reduce waiting lists, but the government target of 95% of people receiving planned treatment within four months stood at 64.9% in March 2026, according to the Government Targets factsheet. With long waits for non-urgent treatment, people with private cover are more likely to use the cover.
Your age band
Most health insurance premiums are priced by age, so your premium usually goes up as you move into an older age band, on top of any general price increase. This is why some people see larger jumps at certain birthdays.
Health insurance price increases in NZ: what the numbers show
The table below brings together the key figures behind recent health insurance price increases in NZ.
| Measure | Figure | Source |
|---|---|---|
| Average claim paid per member, 2021 | $1,097 | FSC / MartinJenkins |
| Average claim paid per member, 2025 | $1,921 | FSC / MartinJenkins |
| Premium increase over five years | Almost 75% | Insurance Business NZ |
| Health insurance holders who cancelled in 2025 | 9% (up from 7% in 2022) | FSC / MartinJenkins |
| People who ended major medical cover in 2025 | 80,770 | FSC / MartinJenkins |
| Adults with private health insurance | About 35% | NZ Health Survey, via FSC report |
A summary of the FSC findings is available in this overview of the report.
Will health insurance premiums keep rising in NZ?
Most of the pressures behind recent increases are long term. New Zealand's population is ageing, new treatments and medicines continue to arrive, and demand for planned surgery remains high. NZ Treasury projections cited in the FSC report expect health spending to grow from about 7.1% of GDP to around 10.6% by 2065, with average health costs per person rising from almost $4,000 in 2025 to over $8,000 by 2065.
For policyholders, that means premiums are likely to keep rising over time, even if the pace changes from year to year. It also means the decisions you make about your cover now, such as your excess and which options you keep, will matter more each year.
What this means at different life stages
- In your 20s and 30s: premiums are usually lower, and taking out cover while healthy can mean fewer exclusions later.
- Families: children are usually cheaper to cover than adults, so trimming extras often saves more than removing a child.
- In your 50s and 60s: premiums rise faster, but so does the likelihood of claiming, so reviewing options is usually better than cancelling.
Should I cancel my health insurance?
If your health insurance feels too expensive, cancelling can look like the quickest fix. The Financial Services Council's chief executive has warned that people are "cutting back the very cover that helps them access care sooner." Before you cancel, weigh up what you would be giving up.
What you lose when you cancel
Your current policy covers conditions that developed after you took out the cover, subject to the policy terms. If you cancel and apply for a new policy later, the new insurer will usually assess your health again. Anything you have seen a doctor about in the meantime may be treated as a pre-existing condition and excluded or loaded. Our guide to pre-existing conditions and health insurance explains how this works.
Timing matters
The cost of health insurance rises with age, and so does the likelihood of needing surgery. Many people consider cancelling in their 50s or 60s, which is often when hip, knee, cataract and heart treatment become more likely. Getting new cover later, with a longer medical history, can be harder.
How to reduce your health insurance premium in NZ without cancelling
There are usually ways to reduce your health insurance premium in NZ while keeping protection against the biggest bills. Common options include the following.
Raise your excess
A higher excess usually lowers the premium because you pay more towards each claim. Choose a level you could comfortably pay from savings. See our guide to choosing your health insurance excess.
Trim day-to-day extras
GP, dental, optical and physiotherapy benefits add to the premium. If you rarely claim for them, removing them may save more than you get back.
Review specialists and tests cover
Specialists and diagnostic tests cover is valuable because much of the waiting happens before surgery. Some people keep the option but adjust limits. Others decide surgical cover alone is enough for now. This is a personal trade-off worth discussing with an adviser.
Keep the core surgical cover
Hospital and surgical cover protects you from the largest costs, such as joint replacements and cancer surgery. For most people, this is the part of the policy most worth keeping.
Check your group scheme options
About 43% of insured Kiwis are covered through an employer or other group scheme. If you have access to a work scheme, check the limits and whether family members can be added. Our guide to group health insurance covers how schemes work.
Compare before you switch
Switching insurers can lower the premium, but a new policy may exclude conditions your current policy covers. Read what to check before switching health insurance providers first.
Health insurance too expensive? Questions to ask before you change anything
- Which parts of my policy have I actually claimed on in the last few years?
- What excess could I comfortably pay if I needed surgery next month?
- Which benefits would I miss most if they were removed?
- Do any of my existing health conditions mean I would struggle to get the same cover again?
- Is there a group scheme I can join, or a family member's policy I can be added to?
Working through these questions often shows that a few targeted changes can bring the premium down without leaving you exposed.
How SHARE - The Advisory can help
If your premium has gone up, we can review your existing policy, show you the effect of changing your excess or options, and compare cover across insurers. We will also flag anything you could lose by cancelling or switching. Learn more about our health insurance advice or contact us to talk it through before you make a decision.
Conclusion
Health insurance premiums rising in NZ reflects higher claims costs, medical inflation, longer public waits and age-based pricing. Those pressures are unlikely to disappear, so it pays to review your cover rather than cancel in a hurry.
Start by raising your excess, trimming extras you rarely use and keeping the core surgical cover that protects you from the biggest bills. To understand what drives your premium in the first place, read our guide on how much health insurance costs in NZ. This article is general information only and is not personalised advice.
Frequently Asked Questions
Why has my health insurance gone up so much?
Premiums have risen because claims costs, medical inflation and use of private cover have all increased. Your premium may also rise as you move into an older age band.
Should I cancel my health insurance if the premium is too expensive?
Talk to an adviser before cancelling. Reapplying later can mean conditions that developed in the meantime are excluded, so reducing your cover is often a better option than cancelling.
How can I reduce my health insurance premium in NZ?
Raising your excess, removing day-to-day extras and reviewing optional benefits are the most common ways to lower the premium while keeping core cover.
How many New Zealanders have cancelled health insurance?
Research for the Financial Services Council found 9% of health insurance holders cancelled cover in 2025, up from 7% in 2022, with 80,770 people ending major medical cover.
Will health insurance premiums keep rising in NZ?
Most industry commentators expect premiums to keep rising as medical costs increase and the population ages. Regular reviews help keep your cover affordable.