Key Highlights

  • A bill that would cut the private health insurance rebate for Australians aged 65 and over has cleared a Senate committee, but only after the Labor chair used her.
  • The Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026 passed the House of Representatives on 16 September 2026.
  • the changes would take effect on 1 April 2027 if the bill passes as drafted.
  • Policyholders in the highest income tier (tier 3, which covers singles above $164,000 and families above $328,000 in 2026–27) already receive no rebate, so they would not be affected.

A bill that would cut the private health insurance rebate for Australians aged 65 and over has cleared a Senate committee, but only after the Labor chair used her casting vote to break a 3–3 tie. With Federal Parliament sitting from Monday 12 October, attention now turns to the Senate. There, the Greens are likely to decide whether older policyholders pay more from 1 April 2027.

What the bill would change

The Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026 passed the House of Representatives on 16 September 2026. It is a bill, not law, and it still has to pass the Senate.

the changes would take effect on 1 April 2027 if the bill passes as drafted. At the base income tier, the rebate for people under 65 would stay at 24.118%. For people aged 65 to 69 it would fall from 28.139% to 24.118%. For people aged 70 and over it would fall from 32.158% to 24.118%.

Policyholders in the highest income tier (tier 3, which covers singles above $164,000 and families above $328,000 in 2026–27) already receive no rebate, so they would not be affected.

Hypothetical example: what it could cost

Hypothetical example: A 72-year-old single on the base tier has a policy costing $3,000 a year. Their rebate is currently 32.158%, or $964.74. At 24.118%, the rebate would be $723.54, leaving them $241.20 a year worse off.

A 67-year-old on the same $3,000 premium would lose the difference between 28.139% and 24.118%. Their rebate would fall from $844.17 to $723.54, a drop of $120.63.

A couple whose policy costs $6,000, with the older partner over 70, would lose about $482.40 a year (8.04 percentage points of $6,000), because the rebate rate generally depends on the age of the oldest person on the policy.

How the committee split

on 7 October with a single recommendation: "The committee recommends the bill be passed." According to The Senior, the committee split 3–3 and the Labor chair, Senator Ellie Whiteaker, used her casting vote. The Greens and the Coalition both filed dissenting reports. The committee's recommendation does not bind the Senate.

The government says the change would save about $3 billion, which would go to aged care. Department modelling projects 44,000 fewer older Australians with private cover by 2028–29.

Critics say the burden would fall hardest on those least able to pay. According to a Private Healthcare Australia release, show about 1.5 million age pensioners would bear about half the cost. Dr Rachel David, PHA's chief executive, said: "Australians should not have to choose between paying their health insurance premiums and paying household bills."