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.
As Tasmania’s leading not-for-profit health and wellness organisation, St Lukes is strongly opposed to these changes. We believe they will significantly reduce government support for older Tasmanians who rely on private health insurance to access timely care.
We’re calling on all Tasmanian Senators and MPs to oppose the proposed changes and stand up for older Tasmanians and the long-term sustainability of our health system.
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.
Is anything being done to oppose the change?
Yes. St Lukes is actively advocating on behalf of members. Recent actions include:
- Meeting with MPs and Senators, including Shadow Health Minister Anne Ruston
- Highlighting the potential consequences for older Tasmanians and the broader health system
- Working with industry partners to present a united position
- Preparing submissions and questions for Budget Estimates and Senate Inquiries
Members are also encouraged to share their views directly with their local Federal MP or Senator. You can find your representative using the AEC’s Find My Electorate tool
How can I have my say?
Your feedback is important and continues to strengthen our advocacy. Many members have already completed our recent survey, providing valuable insights.
Click here to have your say. Please note this survey is for St Lukes member over the age of 65 only.
You can also add your name to a Members Health Fund Alliance (MHFA) petition calling on the Government to reconsider. Sign the petition here. MHFA is the peak industry body for an alliance of private health insurers, including St Lukes, who are not-for-profit or part of a member-owned group.