Private health insurers can open a new health insurance product at any time, at any premium (price), without the Health Minister’s approval. This is different from the process for changing the premiums of existing products, where insurers must seek the Minister’s approval first. This difference has led to the practice of insurers closing a health insurance product and opening a similar new product priced much higher, referred to as ‘product phoenixing’. Product phoenixing can result in consumers paying higher prices for health insurance or receiving lower levels of value or coverage. Addressing product phoenixing was an election commitment in 2025.

This Impact Analysis considers a preferred policy approach – to amend the Private Health Insurance Act 2007 to address product phoenixing – requiring insurers to seek the Minister’s approval for premiums for new products, and existing products for which cover or value to consumers has been reduced. 

The preferred policy approach will ensure an appropriate level of oversight of product premiums, without unnecessarily increasing regulatory burden for insurers. The regulatory burden estimate is $480,000 per year across all 28 insurers, noting larger insurers would likely carry the highest financial burden due to their greater number of product offerings. The Department of Health, Disability and Ageing estimates that there would be no regulatory impact on individuals or community organisations.

The other policy option considered was to maintain the status quo. Under this option, the practice of product phoenixing would likely continue. 

Assessment of the impact analysis: adequate.