The Budget includes a change to the Private Health Insurance rebate that has generated questions from residents in Moore, particularly from older Australians and their families. I want to set out clearly what’s changing, what it means in dollar terms, and the reasoning behind the decision.
What’s currently in place
The Private Health Insurance rebate has been in place since 2004. It reduces the cost of private health insurance premiums and is structured by age:
Under 65 24% rebate on premiums
65 to 69 28% rebate on premiums
70 and over 32% rebate on premiums
This means two households on the same income can currently receive different levels of government support based solely on their age.
What’s changing
The Government is moving to a single consistent rebate of 24% for all Australians, regardless of age.
What this means in practice:
Australians under 65 — no change
Australians aged 65 to 69 — rebate reduces from 28% to 24%
Australians aged 70 and over — rebate reduces from 32% to 24%
The rebate itself is not being removed. It is being standardised.
What it costs older Australians
The actual dollar impact depends on the level of cover held and the insurer. As a guide:
The age-based loading currently adds 4 percentage points for 65–69 year olds and 8 percentage points for those 70 and over
On a typical singles hospital and extras policy, this change will increase out-of-pocket premium costs
The exact amount will vary — check directly with your insurer for your specific policy
The Government’s reasoning
The current system creates an inconsistency where age, rather than income or health need, determines the level of government support. Two people on identical incomes receive different rebates purely because of their age.
The Government’s position is that support for older Australians should be directed through the care system — through Medicare, the PBS, aged care, hospital funding and bulk billing — rather than through an age-based premium subsidy that provides greater benefit to those who can already afford private cover.
This Budget invests:
$25 billion in additional public hospital funding
$3.7 billion in aged care — more beds, more packages, better care
$1.8 billion to make Medicare Urgent Care Clinics permanent
$5.9 billion in new PBS medicines
$1 billion to remove co-contributions for personal care services like showering through the Support at Home program
The argument is that those investments deliver broader, more equitable benefit to older Australians than an age-based rebate loading that primarily benefits people already holding private cover.
My view
I understand why this change causes concern — particularly for older Australians who have maintained their private health cover for decades and have factored the rebate into their household budgets.
I also recognise that a system where age alone determines the level of government subsidy, independent of need or income, is difficult to sustain and harder to justify. The Government’s approach is to redirect that support into the care system where it reaches more people more equitably.
If you have specific concerns about how this change affects your premiums, I’d encourage you to contact your insurer directly to understand your exact position. And if you want to talk through the broader changes, my office is always available.