Medibank Private (ASX:MPL) and other Australian private health insurers face the key risks of rising interest rates and historically declining participation rates, especially for younger people, said Jefferies in a Monday note.

Jefferies expects the insurer to give an update on the first quarter of fiscal year 2026 performance and funding for private hospitals at its upcoming investor day.

The investment firm noted that the insurer expects to grow its market share of resident health insurance despite moderating industry growth in fiscal year 2026.

Jefferies has kept a hold rating on MPL with a price target of AU$5.40.

The company's shares rose past 2% in Tuesday's close of trading.