Proposed changes to the Private Health Insurance Rebate
The Federal Government has proposed changes to how the Private Health Insurance Rebate is applied, meaning the higher rebate tiers currently available to Australians aged 65 and over will be removed from April 1, 2027.
If implemented, this would represent a significant withdrawal of government support for our members who rely on private health insurance to access care as they age.
More information on the Australian Government’s Rebate on Private Health Insurance can be found here.
Understanding the timeline
On 22 April 2026, Federal Health Minister Mark Butler announced that the PHI rebate would be changed so that:
- The rebate rate for older Australians is aligned with the rate paid to the general population;
- Eligibility is determined solely by income;
- Savings are redirected to fund important Aged Care services;
Further detail was provided in the 2026 Federal Budget (handed down on May 12). The Legislation was introduced into the House of Representatives on June 25, where it was referred the Community Affairs Legislation Committee for inquiry.
The committee will review the bill in detail, seek input from stakeholders and the public, and assess its potential impacts before making recommendations to Parliament. It has until 7 October 2026 to complete this process and report back.
Key details of the proposed changes
- 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 current system, people aged 65-69 receive a rebate of 28.337%, while people aged 70 and over receive a rebate of up to 32.385%. This additional support makes it easier to afford cover at a time when you're more likely to need it.
- Under the proposed changes the higher 28% (age 65-69) and 32% (age 70+) rebates would be removed; and all Australians, regardless of age, will have the same 24% rebate rate applied.
Importantly, there’s no need to feel pressured into making any immediate decisions. If legislated, these changes would commence on 1 April 2027, aligning with the start of the private health insurance premium year.
Who will be affected by this change?
If implemented from April 1, 2027:
- Australians with private health insurance aged 65-69 earning under $101,000 as a single, or $202,000 as a family, will see their rebate reduced from 28 per cent to 24 per cent.
- Australians with private health insurance aged 70 and over in the same income brackets will see their rebate reduced from 32 per cent to 24 per cent.