Southern Cross Health Insurance Premium Increases in 2026: Why Prices Are Rising and What You Can Do

We often hear from Southern Cross health insurance members who are surprised - and often frustrated - by premium increases when their policy renews. We explain why Southern Cross health insurance premiums continue to rise, what the 2025 financial results reveal, and the practical steps you can take to reduce costs or compare alternatives without putting essential cover at risk.

Summary: Southern Cross Premium Increases Explained

• Southern Cross premiums have increased by around 10–30% per year for many members, based on Southern Cross financial statements, media coverage and member reports. In some cases – particularly for members over 50 or those on comprehensive plans - increases have been even higher.
• Using data from the Southern Cross 2025 Annual Report, we explain what’s driving these increases, whether Southern Cross still offers value for money, and when it may (or may not) make sense to switch insurers.
• We also unpack the pre-existing conditions issue, which stops many people from changing providers due to the risk of exclusions.
• While this article is designed to help Southern Cross members make informed decisions, it’s also useful if you’re comparing health insurers for the first time.

Important: Southern Cross is a member-owned organisation that exists for its policyholders. In 2025, it returned more than 94 cents of every premium dollar as claims, well above the wider market average. This article is soley designed to help members understand their options.

What we cover

• Where your Southern Cross premium goes - and why costs keep rising
• The main reasons premiums increase year after year
• Pre-existing conditions and switching insurers
• Ways to reduce your premium without changing insurer
• Alternative health insurers currently accepting new members
• What to do next
• Frequently asked questions

Background: Southern Cross’ Role in the New Zealand Health Insurance Market

Southern Cross Health Society was established in May 1961 by Auckland surgeons who wanted New Zealanders to have better access to private healthcare alongside the public system. It operates as a Friendly Society, meaning it is not-for-profit and exists solely for the benefit of its members - not shareholders.

Southern Cross Market Share and Member Numbers (2025)

• Covers around 60% of New Zealand’s health insurance members
• Pays 68% of the total value of health insurance claims nationwide
• 951,808 members as at 30 June 2025
• Insures roughly one in five New Zealanders

(Source: Southern Cross 2025 Annual Report)

Why Southern Cross Attracts More Attention Than Other Insurers

• Any premium increase affects more people than all other insurers combined. A 15% increase at Southern Cross impacts around 950,000 members; the same increase at a smaller insurer may affect 50,000.
• As a not-for-profit, Southern Cross cannot justify higher premiums through shareholder returns. Every dollar collected must go to claims, operating costs, or reserves – which naturally invites scrutiny.

Where Your Southern Cross Health Insurance Premium Goes

Southern Cross has no shareholders and pays no dividends. According to its 2025 financial statements, premium income is allocated as follows:

What the 2025 Financial Results Show

• Southern Cross paid out over 94% of premiums as claims in 2025 - the highest ratio in more than a decade.
• The rest of the market averaged around 75 - 76%, based on Financial Services Council (FSC) data referenced in Southern Cross disclosures.
• That difference equates to approximately $290 million more returned to Southern Cross members than would have been paid if claims ratios matched the wider market.
• Despite rising premiums, Southern Cross lost $57 million on health insurance in 2025, following a $99 million loss the year before.
• Group reserves have fallen by around $140 million over two years.

Southern Cross has been clear in its annual report: even with recent increases, current premiums do not fully cover the cost of claims. As the Chair noted, losses were driven by an unusually high volume of claims alongside ongoing strain in the public health system. The CEO echoed this, highlighting increased use of private healthcare by members of all ages.

Our View

Southern Cross is not overcharging members. Instead, it is trying to price health insurance sustainably in an environment of medical inflation, an ageing population, and ongoing pressure on public hospitals.

How Southern Cross Members Used Their Health Insurance in 2025

Southern Cross members made extensive use of private healthcare in 2025:

• 340,000+ surgical procedures (up 7%)
• 651,000+ specialist consultations (up 7%)
• 853,000+ GP visits (up 5%)
• 539,000 prescriptions (up 153%, largely due to the return of $5 prescription fees)

Major payouts included:

• $80.7m on knee replacements (up 14%)
• $80.4m on colonoscopies (up 14.5%)
• $72.2m on hip replacements (up 10%)

In real terms, that meant 2,599 knee replacements, 2,490 hip replacements, and 2,004 tonsillectomies funded through member premiums.

Why Southern Cross Health Insurance Premiums Keep Increasing

While individual increases vary, three structural factors affect all members.

1. Medical Inflation Is Outpacing CPI

Medical inflation rose to 14.5% in 2025, up from 7.4% the previous year (as reported by Stuff). This reflects higher costs for surgeries, specialists, prosthetics and hospital care. When treatment costs rise at this pace, premiums must follow.

2. Claims Frequency and Claim Costs Are Increasing

• Claims volume increased 16% year-on-year, with total claims value up 14%.
• Southern Cross paid around $4.7 million per day in claims.
• 52% of members made at least one claim in 2025, rising to 67% for those aged 60+.

3. Age-Based and Risk-Based Health Insurance Pricing

New Zealand health insurance is priced by age and risk. As you get older, premiums increase faster than CPI because claim frequency and cost rise sharply with age. This applies across all insurers, not just Southern Cross.

Pre-Existing Conditions and Switching Health Insurers

Many members hesitate to switch insurers due to concerns about pre-existing conditions. While exclusions are common, switching is not always impossible.

Typically:

• Previous conditions (e.g. back surgery, heart conditions) may be excluded
• Some insurers will consider covering certain conditions if you’ve had continuous cover

In some cases, accepting exclusions on low-risk, already-treated conditions can result in substantial savings. These decisions should be made carefully, with full clarity on what would and wouldn’t be covered.

Southern Cross Member? Compare Alternative Health Insurance Options

Before renewing or cancelling, it’s worth checking what other insurers would charge for equivalent cover.

• LifeDirect compares policies from nib, Partners Life, AIA and more
• We confirm which pre-existing conditions would be excluded
• Comparing is free, fast, and obligation-free

How to Reduce Your Health Insurance Premium Without Switching Insurer

If you want to stay with Southern Cross, these strategies can significantly reduce premiums:

1. Increase Your Excess

Adding a $1,000–$4,000 surgical excess can reduce premiums by 20–40%. The excess usually applies only to surgical hospital claims, not GP or specialist visits.

2. Review Your Coverage Level

Comprehensive plans cost more. Many members restructure cover around major financial risks rather than everyday healthcare costs they can afford themselves.

3. Adjust Plans and Add-Ons

Southern Cross offers multiple base plans and optional extras. Many people save by switching base plans, removing unused modules, or tailoring extras more closely to their needs.

Alternative Health Insurance Providers Accepting New Members

Tip: Always compare quotes on a like-for-like basis - same excess, same benefits, same limits.

What to Do If Your Southern Cross Premium Has Increased

If your renewal has jumped unexpectedly:

1. Ask Southern Cross to review your plan
2. Request pricing with higher excess options

If you’re considering switching:

1. Get quotes from at least two alternatives
2. Confirm exclusions in writing before cancelling
3. Understand the real cost of self-funding healthcare if you cancel altogether

What We Expect for Southern Cross Premiums From 2026 to 2028

Based on current data:

• Annual increases are likely to continue
• Medical inflation will remain well above CPI
• Older members and comprehensive plan holders will see the largest rises
• Managing premiums will rely more on plan design changes than headline discounts
• Switching insurers will become harder as pre-existing conditions accumulate

The key question isn’t whether premiums will rise, but how to manage rising costs while keeping essential cover.

Frequently Asked Questions About Southern Cross Premium Increases

Why is my increase higher than the average?

• Premiums vary by age band, plan type and claims experience. A 15% average might mean 8% for a younger member and 25% for someone over 60.

Can I negotiate my premium?

• No - but you can adjust your excess or cover level to reduce costs.

Is Southern Cross still good value?

• On claims alone, yes - but value depends on whether your plan matches your needs.

What happens if I cancel and rejoin later?

• You’ll be treated as a new applicant, with potential exclusions or decline.

Will premiums ever go down?

• Unlikely, given medical inflation, ageing demographics and public system pressure.

Southern Cross member? Before making any decision, compare your Southern Cross health insurance with other providers through LifeDirect and make sure you’re paying for cover that genuinely fits your needs and budget.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.