But Labor has slammed the federal government for giving private health insurers the green light to lift private health insurance premiums above inflation, which it expects will be a major hit to family budgets.

Health Minister Greg Hunt says the 3.25 per cent rise for the 13 million Australians with private health cover is the lowest since 2001 and follows reforms aimed at making the insurance simpler and cheaper.

"We've delivered the largest reforms in private health insurance in a decade and today we are delivering the lowest change in private health premium in 18 years," he told reporters in Brisbane on Wednesday.

Under the premium change, coming into effect on April 1, singles will pay an average $1.14 more per week while a family will shell out an extra $2.35.

Opposition health spokeswoman Catherine King said that will force more people to dump their private health cover.

"Already, Australians are downgrading or ditching their private health cover in record numbers in response to relentless price rises, soaring out-of-pocket costs and growing exclusions," she said.

Premiums rose by just over 50 per cent between 2010 and 2016, before climbing another 3.9 per cent in 2017.

In its annual review of the private health insurance industry released in November, the Australian Competition and Consumer Commission found more Australians are downgrading or dumping their private health insurance because of rising premiums.

Labor has vowed to slap a cap on big health insurers to restrict their annual premium rises to two per cent if it wins the next federal election due in May.

But Mr Hunt said the opposition's plan will take away rebates from five million people, ultimately amounting to a rise in premiums of 16 per cent.

The first of the insurers to move on the government's approved hike was Medibank Private and ahm, which will lift premiums by an average of 3.3 per cent.

CEO Craig Drummond said this was the group's lowest average premium increase in 18 years.

More frequent and expensive hospital admissions have pushed healthcare costs about 4.6 per cent above inflation each year in the past decade, he noted.

The coalition government, meanwhile, has introduced its own reforms, including new rules that allow private health insurers to offer 18-to-29-year-olds discounted premiums, as well as better mental health cover for all customers and benefits for people in rural areas who need to travel for medical treatment.

Premium changes by providers can be above or below the government average depending on a variety of factors, including coverage type and location.

The Consumer Health Forum chief executive Leanne Wells hopes the rise will be matched with an easing of out-of-pocket costs.

"Consumers will want to see value for money for the thousands of dollars they pay out in premiums each year," she said.

Australian Associated Press