10 Jul 2026Opinion pieces
Who really has health insurance in Australia? The answer might surprise you.
By Dr Rachel David
One of the biggest misconceptions about health insurance in Australia is that it’s mainly something for wealthy people.
The latest Australian Taxation Office data tells a very different story.
More than 9.3 million Australians who lodged a tax return in 2023–24 had health insurance. When you look at who those Australians actually are, you find that health insurance is held by a remarkably broad cross-section of the community.
More than one-third of insured Australians reported annual taxable incomes below the national median taxable income. Three in five had taxable incomes of $90,000 or less, and more than 3.4 million had taxable incomes of $55,000 or less.
Only 16% reported taxable incomes above $150,000.
These figures challenge the perception that health insurance is predominantly a high-income product. Instead, they show that millions of Australians on ordinary incomes continue to make room in their household budgets for health cover because they value the security, choice and timely access to care it provides.
The data is even more revealing for older Australians.
Around 70% of insured Australians aged 65 and over reported taxable incomes of $60,000 or less, while more than half reported taxable incomes of $37,000 or less. More than 437,000 pensioners who lodged a tax return in 2023–24 held health cover, an increase of 5.2% from the previous year.
These aren’t wealthy retirees. They are Australians living on fixed or modest incomes who have chosen to keep paying for health insurance, despite the rising cost of living, because they want the peace of mind that comes with being able to access healthcare when they need it.
That’s why this data should give the Government pause as it considers legislation to reduce the private health insurance rebate for many Australians aged 65 and over.
The tax data simply doesn’t support the idea that older Australians with private health insurance are predominantly high-income earners who no longer need government support. Quite the opposite. It shows the overwhelming majority have modest taxable incomes, with around 80% currently qualifying for the maximum rebate.
For many older Australians, the rebate isn’t a bonus. It’s what makes health insurance affordable.
Reducing that support risks forcing some retirees to downgrade or abandon their cover altogether at precisely the stage of life when they are most likely to need planned surgery, rehabilitation, mental healthcare or treatment for chronic disease.
That would be a bad outcome for them and for the broader health system.
Nearly three-quarters of Australians with health insurance receive the means-tested rebate, with more than 5.3 million people eligible for the maximum level of support. Far from being a subsidy for wealthy Australians, the rebate is an investment that helps Australians on low and middle incomes maintain their health cover.
In return, millions of Australians contribute to the cost of their own healthcare through the private system rather than relying solely on taxpayer-funded services. Every patient treated in a private hospital helps preserve scarce capacity in public hospitals for people who depend on them.
One of the strengths of Australia’s health insurance system is that it operates on the principle of shared risk.
Most of us won’t need expensive hospital treatment every year. Some years we’ll claim very little. Other years we may need a joint replacement, cancer treatment, heart surgery or intensive mental healthcare. Throughout our lives we move between being net contributors and net beneficiaries.
That’s how insurance works.
The premiums paid by millions of Australians who don’t need significant treatment in a given year help fund care for those who do. Later, those same people may rely on that shared pool when their own health changes.
Community rating means Australians pay the same premium regardless of their health status. That only works when participation remains broad and affordable.
If affordability is undermined, people begin leaving the system. As the membership pool becomes older and sicker, costs are spread across fewer people, putting further upward pressure on premiums for everyone.
Australia’s public and private health systems have always worked best as partners. The rebate has long recognised that when Australians are supported to maintain health insurance, they are investing in their own healthcare while helping relieve pressure on the public hospital system.
The latest ATO figures remind us that this partnership isn’t being sustained by wealthy Australians.
It is being sustained by millions of ordinary Australians, including hundreds of thousands of pensioners and retirees, who continue to prioritise health insurance despite increasing financial pressures.
Any policy that makes health insurance less affordable for these Australians deserves careful scrutiny. The evidence suggests the people most likely to be affected are not the wealthy. They are retirees on fixed incomes who have done the responsible thing by maintaining their cover and contributing to a health system that benefits everyone.