The Abbott government has approved the biggest rise in private health insurance premiums in almost a decade, as it walks away from any early implementation of its election promise to scrap the means testing of the 30 per cent rebate for health fund members.

In a pre-Christmas whammy for Australians grappling with rising health costs, the average family policy including ancillaries such as dental is likely to rise by more than $200 a year because of the average 6.2 per cent increase for 2014 endorsed by Health Minister Peter Dutton.

For a basic family policy, the rise will be about $150 a year. Singles can expect to pay an extra $100 a year in premiums.

For all categories, the increase is almost triple the overall rate of inflation. The last time there was a bigger increase was in 2005, when premiums rose by 7.96 per cent.