That’s on top of the 4.41% industry average increase that hit millions of policyholders on 1 April, signifying the highest jump in premiums since 2017.

Firstly, what is the rebate?

If you have private health insurance in Australia, you may qualify for the private health insurance rebate – a government initiative designed to help reduce the cost of cover, particularly for older Australians and those on lower incomes.

This rebate is applied as a percentage and can reduce the cost of your hospital cover, extras cover or a combined policy, lowering the base premium you need to pay.

But the latest budget wants to slash the rebate for older Australians, meaning you would actually end up paying more for the same level of cover. What’s worse is that most premiums are expected to rise again from 1 April 2027.

What are the proposed changes to rebates for seniors?

Australians aged 65 to 69 earning less than $105,000 individually, or $210,000 as a couple or family in FY27, could see their rebate drop from 28.139% to 24.118%.

For those aged 70 and over within the same income thresholds, the rebate may fall from 32.158% down to 24.118%, reducing the level of government support available toward their premiums.

The move could see older Australians scrambling to find hundreds of dollars more in the household budget for the same level of health cover.

What does it mean in dollar terms?

In simple terms, it means a lot, but will vary based on your circumstances, the type of policy you hold, your income and the rebate you’re entitled to.

Private Healthcare Australia estimates that in one case, a single Aussie with Gold Hospital cover could see their annual premium climb by around $800.

Is ditching cover the answer?

While there’s no denying that a change in rebates will have an impact on premiums, you may be able to look for a similar level of cover with a smaller price tag.

Or, you may be paying for cover and services you don’t use when there are lower levels of cover available for a cheaper price tag. There are a few things you can do to maintain cover and cushion the change to rebates.

• Switch rather than cancel your cover: If you’ve been with the same insurer for years, you might be missing out on better-value policies or new customer offers. Regularly comparing options can help seniors find similar cover that better suits their budget.
• Consider increasing your excess: Choosing a higher excess can lower your ongoing premiums. This can be a practical option if you don’t expect to utilise hospital treatment soon and have some savings set aside for unexpected costs.
• Make the most of available incentives: Many insurers offer benefits like waived waiting periods on extras or weeks of free coverage to attract new members. These perks can help seniors stretch their cover further and improve overall value.
• Right-size your level of cover: Not everyone needs top-tier cover. Policies with fewer included services, such as excluding pregnancy or other treatments unlikely to be needed, can offer meaningful savings while still covering essential care.
• Review extras and trim the excess: Extras policies can include a wide range of services, but if you’re not regularly using them, you may not be getting good value. Removing or scaling back unused benefits can reduce premiums. You can always upgrade again if your needs change – just make sure you take any waiting periods into account.
• Switch with peace of mind: Moving to a similar or lower level of cover with a new insurer usually means you won’t have to re-serve waiting periods for services you’re already covered and served waiting periods for. Pre-existing conditions also don’t affect your ability to switch providers for service you’ve already served waits for, making it easier to shop around for better value.