NZ Health Insurance Premiums Are Soaring in 2025 – What You Need to Know

New Zealanders are facing the steepest rise in health insurance premiums in living memory.

Global consulting firm Aon has ranked New Zealand among the highest in the world for medical cost inflation, with our medical trend rate jumping from 7.4% in 2024 to 14.5% in 2025 – more than double our general inflation rate. (i)

Closer to home, major providers are reacting to these cost pressures:

• nib has announced a 22% increase across all major plans (including Easy Health and Ultimate Health Max) from May 2025.
• Southern Cross is raising premiums by an average of 21%
• Accuro/UniMed have also indicated pricing increases of up to 40% from September 2025, in light of rising claims and cost pressures.

Yes, those numbers are correct – some New Zealanders are seeing premium increases of 20–40%!

Why Are Health Insurance Costs Rising So Rapidly?

Several factors are driving these extraordinary hikes:

✅ Increased claims volumes – more people are using their cover, more often
✅ Rising procedure costs – even with cost-control measures in place
✅ Medical technology advancements – improving outcomes but pushing up costs (medical inflation)
✅ An ageing population – older members tend to claim more
✅ Pressure on the public system – long waitlists are shifting demand to private care

Should You Still Keep Your Health Cover?

With premiums surging, it’s tempting to question whether private insurance is still worth it. Some Kiwis are:

• Adjusting their policies (raising excess or reducing benefits)
• Considering “self-insurance” (setting aside funds for medical emergencies)
• Dropping cover entirely and hoping the public system can cope
• Shop around for a better deal but this can be a serious risk, especially if you have pre-existing conditions which may become exclusions on a new policy and leave you without coverage that you had with your previous insurer.

Each option comes with trade-offs. And for those exploring self-insurance: keep in mind that saving enough for a major procedure (think the likes of a hip & knee replacement) could mean setting aside $35,000–$70,000. It’s not a quick fix.

And remember: once you cancel, rejoining later can be difficult, especially if health conditions have developed in the meantime.

Employer Group Schemes – A Hidden Advantage

If your employer provides health cover as part of a group scheme, you may be protected from much of this impact.

Group policies often include automatic acceptance, and employers cover both premiums and Fringe Benefit Tax (FBT) – a significant cost in itself. If you're fortunate enough to have this benefit, now’s the time to value it.

In Summary

Health insurance in New Zealand is changing – fast. Premiums are rising at historic rates. While painful, these increases reflect real pressures across the healthcare system.

For those who can afford to stay insured, the peace of mind may be worth it.

But whether you stay insured, adjust your cover, or explore alternatives, make sure your healthcare strategy is part of your overall financial plan and calls for careful consideration.

Either way, the time to consider your options with regards to your Health Insurance is now.

Need help reviewing your cover or exploring your options?

We’re here to talk it through.

We will attempt to get in touch with you at your policy renewal to discuss things with you, but if you receive your renewal information before we have made contact, please reach out to us so we can help.

References:

(i)              https://www.aon.com/en/insights/reports/the-global-medical-trend-rates-report