People should shop around for the best deal on health insurance, says Health Minister Tanya Plibersek, as she announced an average premium increase of 5.6 per cent.

Ms Plibersek told reporters in Sydney that the increase would add $1.70 a week to the cost of cover for the average single person, and $3.70 a week to the cost of cover for an average family with the top level of cover.

Warning ... Tanya Plibersek. Credit:Andrew Meares

The annual premium increases, which must be approved by government, take effect from April 1.

Ms Plibersek said that she was confident private health insurance membership would continue to grow, despite the premium increase and other recent changes. Since July, the 30 per cent private health insurance rebate has been means tested and parliament is considering a proposal to eliminate subsidies on the Lifetime Health Cover loading, which applies to people who do not take out private cover in the financial year in which they turn 31.