Purpose of the Bill

The purpose of the Health Legislation Amendment (Improving Choice and Transparency for Private Health Consumers) Bill 2026 (the Bill) is to:

• amend the Health Insurance Act 1973 (HI Act) and Private Health Insurance Act 2007 (PHI Act) to allow the Department of Health, Disability and Ageing (the Department) to publish information for consumers on medical fees charged by medical practitioners on the Medical Costs Finder website; and
• amend the PHI Act to require private health insurers to seek Ministerial premium approval for new products, and existing products where certain changes are proposed.  

The legislation has been welcomed by the Australian Medical Association (AMA) and Private Healthcare Australia.

Background

Out-of-pocket costs for medical specialists  

An out-of-pocket medical cost is ‘the difference between the amount a doctor charges for a medical service and what Medicare and any private health insurer pays’. Out-of-pocket costs may also be referred to as ‘gap’ or ‘patient payments’.

In Australia, medical practitioners determine the fees they charge for the services they provide. Medicare subsidises medical services based on a schedule of fees, known as the Medicare Benefits Schedule (MBS). Doctors may choose to charge more than the schedule fee. In this situation, patients pay the fee charged and then claim the Medicare benefit and any private health insurance payments (if applicable), with the difference being the out-of-pocket cost to the patient.

For several years, out-of-pocket costs have been an increasing concern for both patients and governments. Of particular concern are out-of-pocket costs associated with medical specialists. According to a 2025 report from the Grattan Institute ‘average out-of-pocket costs for specialist attendances have grown by 73 per cent, in real terms, since 2010’, with the average out-of-pocket cost (for those who paid a bill) being $300 in 2023 (p. 8).  

As outlined in the Explanatory Memorandum to the Bill, out-of-pocket costs are a driving factor in patients not taking up referrals to see a medical specialist, and therefore missing out on medical care. In 2024–25, ‘8.6% of people delayed or missed specialist care (over 800,000 people) because of cost’ (p. 2).  

In March 2019, in an attempt to address issues surrounding out-of-pocket costs, the then Coalition government announced a ‘national strategy to tackle excessive out of pocket costs charged by medical specialists’, which included the development of a website to ‘provide Australians with transparency… about the costs of specialist services’ (p. 1). Development of the website was a recommendation arising from the Ministerial Advisory Committee on out-of-pocket costs (p. 2).

Medical Costs Finder

The ‘Medical Costs Transparency’ website (the Medical Costs Finder) was launched in December 2019. It is intended to provide consumers with information on typical out of pocket costs for a range of medical procedures and services, helping them to make an informed decision when considering treatment and reduce ‘bill shock’. The Medical Costs Finder shows typical fees charged by doctors, associated Medicare rebates and if relevant, contributions from private health insurance.

Following its introduction the Medical Costs Finder was criticised by both consumers and doctors due to a lack of useful information on the site, particularly in relation to individual specialist fees. While the Medical Costs Finder provides high-level data on average bulk-billing rates and out-of-pocket costs across specialties using administrative data, it provides little information on fees charged by individual specialists. This is primarily because the Department relies on specialists to provide data on their indicative fees, gap arrangements and service locations, a process which is currently voluntary. Information from private health insurers showing their financial arrangements with specialists and how often patients pay out-of-pocket for services that aren’t fully covered by their insurance policy is also voluntary to provide. Uptake by specialists and insurers to provide this data has been very low, with ‘only 1–2% of specialists and 10% of insurers… participating on the website as at December 2025’ (p. 2).  

Proposed changes

Prior to the 2025 election, the Australian Labor Party (ALP) announced that if re-elected it would upgrade the Medical Costs Finder website ‘to display the average fee charged by every eligible specialist across all non GP specialities’ using administrative data (p. 2). The 2025–26 Budget provided $7.0 million over five years from 2024–25 to implement this change (p. 54).

As outlined in the Explanatory Memorandum, the proposed amendments in this Bill will:

…allow for the publication of the relevant data on the Medical Costs Finder, without the need for input from medical practitioners as it will be drawn from Medicare, hospital and insurer billing data collected by government. Importantly, the amendments will not affect the privacy of consumers and no patient information will be published.

…

authorise the use and disclosure of the relevant datasets (including linkage between them) supporting Transparency by Default. These datasets are Medicare Benefits Schedule claims data, Centralised Register of Medical Practitioners (CROMP) data and Hospital Casemix Protocol 1 (HCP1) data (p. 2).

…

To support the proposed publication of the information on the Medical Costs Finder, the department is developing an analytical approach for the derivation of a single fee figure that can be published for a medical practitioner’s provision of a service for a given financial year (similarly with figures that can be published with regards to hospitals and insurers). The approach will ensure patient privacy is protected and that figures published are credible and meaningful for consumers (p. 3).

Regulating private health insurance premiums

Private health insurance is regulated primarily under the PHI Act, the Private Health Insurance (Prudential Supervision) Act 2015, and related rules and regulations.

Under section 66-10 of the PHI Act, private health insurers must apply to the Minister for Health for approval of premium changes. The Minister must approve the proposed changes unless satisfied that a change would be contrary to the public interest.

As outlined in the Explanatory Memorandum, ‘the process for approving premiums has been managed administratively through an annual ‘Premium Round’. However, insurers can close and open products at any time without Ministerial scrutiny’ (p. 3). The ability for insurers to close and open products at their discretion has led to situations where insurers can ‘close an existing product and open an identical or similar new product at a higher premium’ while avoiding the existing oversight requirements (p. 3). This is known as ‘product phoenixing’.

In recent years, phoenixing has resulted in some consumers experiencing price increases for private health insurance premiums well above the average approved yearly increase. See for example:

• M Blades and J Bardell, ‘Insurers hiding soaring increases to top-level health cover’, Choice, original publication date February 2024, updated February 2026.
• Commonwealth Ombudsman, ‘Are health insurers using loopholes to increase premiums? Review of Choice Magazine's analysis about health insurers’, Public statement, December 2024
• M Smith, ‘Labor sends warning to health insurers’, AFR Weekend, 20 September 2025
• R Down, ‘Health insurers put on notice over 'price gouging'’, The Australian, 10 December 2024
• B Levinson, ‘'Cheap trick' used to up the cost of health cover’, Canberra Times, 10 December 2024

The Bill seeks to address ‘phoenixing’ by amending the PHI Act to require insurers to apply to the Minister for approval of premiums charged for a new product and ‘where changes are made that reduce cover, a benefit or another term or condition of an existing product’ (p. 3). The Bill is also making additional changes to existing practices that occur under the annual premium round.

Policy position of non-government parties/independents

At the time of writing there does not appear to be any comment from non-government parties or independents on the Bill.