Most Australians with private health insurance have been urged to wait until after April 1 to make changes to their cover - contradicting the advice of previous years.
Typically, those with health insurance are advised to research and prepay 12 months in advance to lock in their current price ahead of the annual April 1 hike - which will average 3.25 per cent this year.
But most of the 13 million Australians with private health cover would be better off waiting to make a decision due to upcoming sweeping government reforms, according to consumer advocacy group Choice.
"The changes are so large that what might look like a good deal now could be bad value after April 1," Choice spokesman Jonathan Brown told AAP.
Under the new system, hospital policies will be categorised by four tiers - Basic, Bronze, Silver and Gold, and each tier will have a minimum standard cover for hospital services and treatments.
However, Choice says the advice to "wait and see" comes with a strong caveat for those who have cover and anticipate a specific health need, such as pregnancy or a hip replacement.
All current policies will be moved to the category best resembling the new tiers, leading some people to lose cover for previous treatments.
Upgrading or switching policies before the changes come into effect - insurers have until April 1, 2020 to move to the new system - will ensure policy holders avoid re-serving waiting periods, which can be up to 12 months.
Meanwhile, the changes mean some people may find themselves with more cover than they need.
"People need to check with their health fund now," Mr Brown said.
"It really is the year to do your research."
Under the average premium change, singles will pay an average $1.14 more per week while a family will shell out an extra $2.35.
Health Minister Greg Hunt says the average 3.25 per cent rise is the lowest since 2001, but it is still higher than the inflation rate of 1.8 per cent.
It's a 66 per cent cumulative price hike since 2009, while CPI has risen by only 20 per cent over the same period, Mr Brown said.
Some insurers have raised premiums by 5.9 per cent according to Choice.
"A lot of health funds are using this as an opportunity to raise health prices significantly and it's really disappointing to see them go above inflation," Mr Brown said.
For the first time, health insurance has overtaken electricity as the main household concern according to a Choice survey of more than 1000 Australians released last week.
Choice has also warned people not to trust commercial sites comparing health policies, saying it has paused its own comparison tool until there are more facts about the quality of coverage in the market.
"Marketers are capitalising on the confusion in the private health market," Mr Brown said.
But price comparison website operator iSelect rejected this.
"We have worked closely with all the health insurers on our panel to make sure our comparison services reflect the upcoming changes," iSelect Health spokeswoman Laura Crowden said.
"Customers comparing or purchasing health insurance through iSelect can be confident that the policy we recommend will meet their needs both today and after April 1, based on the customer's current circumstances."
Australian Associated Press