Is your old health insurance policy still worth keeping? How to tell if it is a closed product

Health insurers in Australia often stop selling a policy without ending it. The people already on it keep it, renew it and pay the yearly increase, while new customers are offered something else. This page explains what that means in law, what changed in September 2026, and what to look at before deciding whether an old policy is still worth keeping.

What is a closed health insurance policy?

A closed policy is one an Australian insurer no longer sells but still renews for its existing members. PrivateHealth.gov.au’s glossary defines a closed policy as “a policy which is no longer available for sale, but which continues to cover existing members”. Section 55-10 of the Private Health Insurance Act 2007 is what allows it: closing a product, “such that the product will not be available to anyone except those persons, who at the time of closing, are insured under a policy forming part of the product”, is not a breach of community rating.

In Australian law, closing is different from terminating. A closed policy carries on for the people on it. A terminated policy ends for everyone, and its members are moved to another policy.

Closed policies are common. CHOICE counted more than 48,000 policies, 47% of all policies, closed to new members in an article last updated on 25 October 2022. As at 8 November 2026 no government body publishes a current count.

How can you tell if your health insurance policy is closed?

The plainest test is the Private Health Information Statement, the standard summary every Australian insurer must publish for each policy. On PrivateHealth.gov.au the statement for a closed policy says “Closed to new members” under the premium. The glossary calls this the policy’s status: “Available or Closed”.

One example, read on 8 November 2026: RT Health’s Silver Plus Advantage Hospital $700 Excess, single, NSW and ACT, shows a monthly premium of A$267.09 before any rebate, the words “Closed to new members”, and “Date statement issued: 01 April 2026”. It is used here only to show what the label looks like, not as a recommendation.

Other signs, each worth confirming with the insurer in writing:

• The policy name does not appear among the covers on the insurer’s own website.
• Your yearly statement arrives, but a friend asking for the same policy is offered something else.
• A letter from the insurer says the cover is no longer available to new members.

The name alone proves nothing. Every hospital policy has had to sit in a Gold, Silver, Bronze or Basic tier since 1 April 2020, according to PrivateHealth.gov.au, so an old policy’s statement shows a tier like any new one.

Is a closed policy cheaper or dearer than a new one?

It can be either, and no Australian government body publishes an average to settle it. As at 8 November 2026, neither the Department of Health, Disability and Ageing, APRA nor PrivateHealth.gov.au publishes premiums for closed against open policies.

The published evidence points one way. The Commonwealth Ombudsman reviewed Gold hospital policies in 2024 and found insurers had closed Gold policies and opened very similar ones in the same year. At one insurer, the new policy’s average premium was 21% higher than the closed one in 2023 and 14% higher in 2024. Those figures are quoted from the Parliamentary Library’s Bills Digest 26bd050, because the Ombudsman’s statement could not be opened at its original address on 8 November 2026.

The Ombudsman’s premium factsheet adds the other side: an increase “higher than the average” is “generally an indication that the particular health fund policy has been previously underpriced”. A closed policy whose yearly rise keeps beating the average is a reason to compare. A closed policy that is simply old is not.

What would a 14% or 21% gap cost on a real premium?

The table applies the Ombudsman’s two gaps to a real closed policy, RT Health’s Silver Plus Advantage Hospital $700 Excess (single, NSW and ACT), at A$267.09 a month or A$3,205.08 a year, from its statement issued 1 April 2026. It shows what a gap of that size is worth in dollars, not what any RT Health replacement actually costs.

Plain Cover arithmetic: A$267.09 × 12 = A$3,205.08; each gap is that figure times the percentage. The rebate column uses the ATO’s 24.118% base-tier rate for a single under 65 from 1 April 2026, down from 24.288% for the 2025–26 months from 1 July 2025 to 31 March 2026. Last verified 8 November 2026.

Why leaving a closed policy can cost more than staying

This is the mistake that cannot be undone. Under section 55-10, a closed product stays available only to the people on it when it closed. Leave it, and the insurer is not obliged to take you back, even if the replacement turns out dearer.

Three things are lost in the move, and none of them shows on the new policy’s price:

1. The price itself, if the closed policy was the cheaper one, as the Ombudsman’s Gold finding shows can happen.
2. Cover the new policy lacks. Waiting periods carry across only for treatments both policies cover. Anything the new one adds starts a new wait.
3. Features no longer sold, such as a lower excess option. CHOICE noted in 2022 that many closed policies listed several excess levels, from A$0 to A$1,000.

A change inside the same insurer can count as leaving, depending on how the insurer has set up the policy. People in this situation typically ask the insurer, in writing, whether a change such as a different excess keeps them on the closed product before agreeing to it.

What changed for closed policies in September 2026?

Parliament passed the Health Legislation Amendment (Improving Choice and Transparency for Private Health Consumers) Act 2026, Act No. 90 of 2026, on 16 September 2026. It received assent on 18 September 2026 and its premium rules, Schedule 2, began on 19 September 2026.

Before then, insurers needed the Minister’s approval to raise premiums on an existing product, but could close a product and open a near-identical one at any price. The Bills Digest calls this “product phoenixing”. The Minister’s 17 February 2026 release described it as insurers that “close a product and open an identical one at a higher price”.

What the Act does, in order:

• From 19 September 2026: a product subgroup first sold on or after that day needs the Minister’s approval of its premiums before it goes on sale.
• From 2 April 2027: a “designated change” that cuts cover or benefits on an existing product needs approval too.
• Unchanged: insurers can still close products. The Minister’s 2026 Statement of Expectations, quoted in the Bills Digest, says insurers keep the right to “close or terminate products at any time in order to protect against prudential risk”.

What happens if your insurer terminates a closed policy?

Terminating ends the product for everyone on it. Rule 9AA of the Private Health Insurance (Complying Product) Rules 2015, Compilation No. 62 in force from 1 July 2026, sets out what the insurer must tell each adult:

Last verified 8 November 2026. The rule also warns of a trap: if you accept the default policy and later move again, treatments the default policy did not cover can carry a new wait, even if your original policy covered them.

Do you re-serve waiting periods when you leave a closed policy?

Only for cover the new policy adds. Section 78-1 of the Private Health Insurance Act 2007 limits the wait on a new policy, for a treatment the old policy covered, to whatever was left of the wait under the old policy. A treatment the old policy did not cover carries the normal maximum under section 75-1: 12 months for a pre-existing condition or obstetrics, and 2 months for most other hospital treatment. The full rules for 2026–27 are in do you re-serve waiting periods when you switch.

Moving off a closed policy does not restart your Lifetime Health Cover loading as long as hospital cover continues without a gap. PrivateHealth.gov.au says transferring between insurers “will not affect your Lifetime Health Cover (LHC) entitlements, provided that you retain hospital cover”. The steps, and the 14-day transfer certificate, are in how to switch health insurance.

What to check on an old policy before deciding

Everything in this table is on the Private Health Information Statement, which an Australian insurer must send at least once every 12 months under section 93-20 of the Private Health Insurance Act 2007. Lay the closed policy’s statement beside the one for any replacement.

The rebate does not change the comparison: the same percentage comes off both premiums, 24.118% for a single under 65 on the base tier in 2026–27. This page is general information, not personal advice; it does not take account of anyone’s objectives, finances or health needs.