A federal cabinet minister has likened Labor’s proposed health insurance premium cap to price controls in North Korea.

The federal opposition has announced it will cap annual premium rises to two per cent for two years if elected.

The Turnbull government has criticised the cap, insisting its own raft of changes in recent years including to the price of prostheses is putting downward pressure on prices.

But Health Department officials would not speculate to a Senate committee on Thursday about the level of next year’s rise or whether it would be around two per cent.

Premiums rose by an average of 3.95 per cent on April 1 this year.

Asked by Labor senator Murray Watt whether the government could guarantee a rise of two per cent next year, Rural Health Minister Bridget McKenzie said the coalition is doing everything it can to put downward pressure on increases and make sure the market is as competitive as possible.

‘You might be doing a few things but you certainly haven’t committed to a cap,’ Senator Watt said.

‘We’re not North Korea, Senator Watt, we can’t stipulate exactly what everybody has to pay for the one product that we’ll offer,’ Senator McKenzie replied.

She later denied she compared Labor’s policy directly to North Korea, but said Labor’s cap won’t do everything the coalition has been able to achieve.