People under 30 could be the biggest winners from the Turnbull government's push to make private health insurance more affordable.

The package, which passed parliament's lower house on Thursday, will allow insurers to offer young people a two per cent discount on their premiums every year up to a maximum of 10 per cent.

The changes will allow some people to increase their excess in exchange for lower premiums - up to $750 for singles and $1500 for families.

People with hospital insurance that does not offer full cover for mental health treatment will be able to upgrade their cover and access mental health services without a waiting period on a once-off basis.

Insurers will be able to offer travel and accommodation benefits for people in regional and rural areas that need to travel for treatment.

Health insurance policies will be categorised into gold, silver and bronze.

Health Minister Greg Hunt said the package would address concerns about affordability and complexity.

"This government continues to take pressure off private health insurance premiums with the introduction of these reforms delivering the lowest annual premium change in almost two decades," Mr Hunt told parliament on Thursday.

Labor's health spokeswoman Catherine King outlined her party's plans to cap premium increases at two per cent a year.