Health insurance costs are driving the latest CPI rise

A file photo of intensive Care patient Colin Hokin at the Prince of Wales Hospital in Sydney. Ian Waldie/Getty Images

The rising cost of private health insurance was the big contributor to the June quarter consumer price index.

This flows from a decision by the federal government giving health insurance companies approval to lift average premiums by 4.84% from April.

According to the Australian Bureau of Statistics (ABS), headline inflation rose by 0.2% over the quarter, leaving it up 1.9% from a year earlier.

The ABS says health costs rose 2.7% in the three months to June, with the main contributor being the annual increase in private health insurance.

That rise was partially offset by a 1.1% fall in pharmaceutical products because more people exceeded the Pharmaceutical Benefits Scheme safety net than in previous quarters.

In seasonally adjusted terms, the health group rose 0.9% this quarter.

Overall health costs rose 3.8% in the 12 months to June.

The next biggest rise in consumer costs was the alcohol and tobacco group, up 1% over the quarter.

Most of this was the flow on effect from the federal excise tax increase from March.

In the last 12 months, tobacco costs have risen by 12.1%.