Tony Abbott has signalled the government will not block an expected rise in private health insurance premiums, saying it is up to the market to set the price.
Health insurers have said they expect premiums to increase by as much as 7 per cent this year, three times the rate of inflation.
The government will announce an approved average increase for each fund in April, as well as an industry average.
When asked if the government would consider blocking increases of up to 7 per cent, Mr Abbott told Fairfax Radio: "From memory this has almost never happened.
"Certainly I don't recall as health minister interfering in this process. In the end, as I said, it's up to the market to set the price. The premiums people pay are between them and their funds."
Health Minister Sussan Ley said: "No decision has been made yet and it would therefore be premature to speculate.
"However, it is important to point out the previous Labor government signed off on average annual premium increases as high as 6 per cent during their time in office, despite their attempts to claim otherwise.
"As always, the best thing people can do is shop around to ensure they get the best deal for private health insurance, and the government encourages them to do just that."
Health funds ask the government each year to approve increases in the prices of their policies, based on expected rises in health costs.
The industry average increase under former health minister Peter Dutton was 6.2 per cent, and reached 6.02 per cent under Labor in 2009.
"I expect premium increases will be consistent with the level of claims inflation the industry is experiencing, which is between 6 to 7 per cent typically," NIB chief executive Mark Fitzgibbon told The Australian Financial Review.
Labor health spokeswoman Catherine King said Australians with private health insurance would pay more if the government takes a "hands off" approach.
"Australia already has the second highest out of pocket health costs in the OECD and this can only get worse under this unfair, shambolic government," she said.
