Private health insurance customers will see premiums increase by an average of 3.25 per cent next year.

The federal government says the April increase is the lowest rise since 2001.

The increase will see singles pay about $1 a week extra and families about $2.

It comes as thousands of people have been downgrading or dumping their private health cover due to concerns about cost and level of coverage.

Campaign Director at consumer advocate organisation One Big Switch Joel Gibson is encouraging people not to drop out of their health insurance policies.

He tells Michael McLaren people should “absolutely” look around.

“Don’t drop out until you’ve had a good look around. There’s never been more help out there than there is now to compare different health insurance policies.”

Click PLAY below to hear the full interview