The Australian Government has proposed reducing the private health insurance rebate for more than 3 million Australians aged 65 and over from 1 April 2027.
If approved by Parliament, many older Australians could pay hundreds of dollars more each year to maintain the health insurance they rely on to access healthcare.
Private Healthcare Australia is calling on the Government to reconsider the proposal and protect older Australians from higher healthcare costs.
If you are concerned about this proposal, share your view today.
- The Government has proposed reducing the private health insurance rebate for many Australians aged 65 and over.
- More than 3 million older Australians affected.
- The proposal has not yet been passed by Parliament.
- Many older Australians could face hundreds of dollars in additional health insurance costs each year.
- Private Healthcare Australia is calling on the Government to reconsider the proposal.
- You can help by contacting your local Federal MP and sharing your concerns.
Jump to:
- Government proposal
- |
- Who is affected
- |
- Impact
- |
- PHA’s Position
- |
- Take Action Now
- |
- FAQ
- |
- Latest News
What is the Government proposing?
The Government has proposed reducing the higher private health insurance rebate currently available to many Australians aged 65 and over.
The proposal is expected to save the Federal Budget around $3 billion over four years.
The change would affect Australians aged 65 and over who earn $105,000 or less a year as an individual or $210,000 or less a year as a family.
The private health insurance rebate helps Australians cover the cost of their health insurance premiums. Older Australians currently receive a higher rebate than younger Australians because healthcare needs generally increase with age.
Under the proposal, Australians aged 65 and over would receive a lower rebate than they do today, bringing their rebate into line with Australians under 65 in the same income bracket.
Who would be affected?
The proposal would affect Australians aged 65 and over who:
- Hold private health insurance; and
- Earn $105,000 or less a year as an individual or $210,000 or less a year as a family.
More than 3 million Australians are expected to be affected.
Many of those affected are pensioners and retirees living on fixed incomes who have maintained private health insurance for decades.
What could it mean for you?
Higher health insurance premiums
If the proposal proceeds, more than 3 million Australians aged 65 and over would receive less assistance from the Government to pay their health insurance premiums.
Depending on your age and level of cover, this could add hundreds of dollars a year to the cost of maintaining private health insurance.
For example, PHA modelling estimates:
- A person aged 65–69 with Gold cover could pay around $655 more each year.
- A person aged 70 or over with Gold cover could pay around $807 more each year.
- A couple aged 70 or over with Gold cover could pay around $1,614 more each year.
PHA modelling below shows expected premium increases if the rebate changes proceed alongside the expected annual average premium change on 1 April 2027:
At a time when many retirees are already facing rising household costs, these additional expenses could place significant pressure on household budgets.
More people may leave or downgrade their cover
The Government’s own analysis estimates around 44,000 older Australians could drop their private health insurance if the proposal proceeds.
Private Healthcare Australia believes many more people may choose to downgrade their cover in order to manage rising costs.
This could leave older Australians without cover for treatments and procedures they are more likely to need later in life, potentially exposing them to higher out-of-pocket healthcare costs or longer waits for treatment in the public system.
More pressure on public hospitals
Private health insurance helps Australians access treatment in the private sector and reduces demand on public hospitals.
If fewer older Australians can afford to maintain their cover, more people may need to rely on already stretched public hospital services.
That could increase pressure on public hospitals and contribute to longer waiting times for care.
Has this change happened yet?
No.
The proposal has not yet been legislated and no changes have been made to private health insurance rebates.
There is currently no need to change, downgrade or cancel your health insurance because of this proposal.
Private Healthcare Australia and other organisations are advocating for changes to the proposal.
If Parliament eventually approves any changes, health funds will communicate directly with their members about what the changes mean and when they would take effect.
What is Private Healthcare Australia advocating for?
Private Healthcare Australia supports measures that keep health insurance affordable and sustainable.
However, we believe this proposal is unfair and risks making healthcare less affordable for older Australians.
Many Australians have maintained private health insurance throughout their working lives, paying premiums year after year. They have done this to look after themselves and reduce pressure on Australia’s public health system.
Reducing government support when people reach the stage of life when healthcare needs typically increase sends the wrong message to Australians who have done the responsible thing by maintaining their cover.
We are particularly concerned about the impact on pensioners, low-income retirees and older Australians living on fixed incomes.
Private Healthcare Australia is calling on the Government to reconsider the proposal and protect older Australians from higher healthcare costs.
Take Action Now
The proposal has not yet been approved by Parliament.
Older Australians still have an opportunity to make their voices heard.
If you are concerned about paying more for your health insurance, contact your local Federal MP and explain how this proposal would affect you and your family.
Contact your local Federal MP
You can:
- Find your local Federal MP using your postcode or suburb.
- Send an email.
- Call their office.
- Arrange a meeting.
- Share your concerns with their electorate office by explaining who you are and where you live in their electorate.
When contacting your MP, consider explaining:
- Why you have maintained private health insurance.
- How much higher costs would affect your household budget.
- Whether you would consider downgrading your cover.
- Whether you would reconsider holding private health insurance altogether.
- Whether you are concerned about relying on the public hospital system if costs continue to rise.
Ask your MP to raise concerns about the proposal with the Prime Minister and Health Minister.
Frequently Asked Questions
Has the private health insurance rebate already been reduced?
No. The proposal has not yet been passed by Parliament and no changes have been made to private health insurance rebates.
When would the change start?
The Government has proposed that the change commence from 1 April 2027.
Who would be affected?
More than 3 million Australians aged 65 and over who currently receive the higher age-based rebate would be affected. This includes pensioners.
How much could I lose?
This depends on your age, level of cover and wheher you are on a family policy. Some older Australians could face hundreds of dollars in additional costs each year.
On top of the annual inflation-driven premium rise next year, the change to the rebate would add:
- 4% to premiums for people in their 60s from next year
- 8% to premiums for people in their 70s and older from next year.
This table shows how much that could cost people based on typical policy premiums listed by Canstar (noting there are significant cost differences between policies).
Estimated additional costs from April 2027 due to proposed rebate change
Age 65–69
+$74 per year
+$148 per year
+$151 per year
+$302 per year
Age 70+
+$148 per year
+$296 per year
+$302 per year
+$604 per year
When these additional costs are added to the expected annual premium rise due to the rising cost of delivering healthcare, the estimated costs are higher again.
Should I cancel or downgrade my health insurance?
No. There is currently no need to make any changes to your cover because the proposal has not been approved by Parliament.
Why does Private Healthcare Australia oppose the proposal?
The proposal will make healthcare less affordable for older Australians and could lead to more people leaving or downgrading their cover, increasing pressure on public hospitals.
Latest News and Media Releases
📰 Government appears to be flying blind on rebate cuts
4 June 2026
📰 Older Australians among biggest Budget losers
12 May 2026
📰 Rebate cuts may impact regional private hospitals
8 May 2026
📰 Seniors face health insurance bill shock of up to $1,600 a year
5 May 2026
📰 Health insurers urge continuation of rebates for low-income seniors
23 April 2026
📰 Cuts to private health insurance rebate disappointing for older Australians
22 April 2026