Over-65 private health insurance rebate change: what is proposed for April 2027

What is changing with the private health insurance rebate for over 65s?

The Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026 would remove the higher Australian Government Rebate on private health insurance that applies when the oldest person on a policy is aged 65 or over. From 1 April 2027, people aged 65 to 69 and people aged 70 and over would get the same percentage as someone under 65 on the same income. The Parliamentary Library’s Bills Digest of 6 July 2026 says the rebate would then be set by income alone.

The bill does four things, as the Senate committee’s report of October 2026 describes them:

• Item 1 replaces paragraphs 22-15(1)(b) and (c) of the Private Health Insurance Act 2007 with one paragraph that points back to the under-65 calculation.
• Items 2 to 4 remove the higher age-based percentages from the rest of section 22-15, while keeping the income tiers, their indexation and the rule that a Lifetime Health Cover loading attracts no rebate.
• Item 5 repeals section 22-25, which currently lets a higher age-based rebate continue for another person on the same policy in some cases after the older person is no longer covered.
• A technical amendment to the Age Discrimination Act 2004 removes a reference to the deleted section. It is not a new age exemption.

The change applies to hospital, extras and ambulance policies alike, because the bill changes the percentage itself (Bills Digest, 6 July 2026). How the income tiers and the oldest-person rule work is explained in our rebate tiers guide.

Is the over-65 rebate cut already law?

No. The first Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026 passed the House of Representatives on 16 September 2026, but the Parliament of Australia bill page records it as discharged from the Senate Notice Paper on 14 October 2026, without a Senate vote. The government introduced the No. 2 bill in the House the next day, 15 October 2026, and moved its second reading. As at 8 November 2026 no later stage is recorded. A bill becomes law in Australia only after both houses pass the same text and the Governor-General gives assent, and neither has happened.

The confusion is understandable. The cut was announced in the 2026–27 Budget, the first bill passed one house, and on 7 October 2026 a Senate committee recommended it be passed. None of those steps changes a premium. The [No. 2] bill carries the same title and the same proposed start of 1 April 2027. Until assent, health funds keep applying the ATO’s age-based rates, and the ATO says the rates for premiums from 1 April 2027 will be published in March 2027.

Last verified 8 November 2026 against both bill pages on the Parliament of Australia website.

What is the private health insurance rebate for over 70s and over 65s now?

For Australian private health insurance premiums paid from 1 April 2026 to 31 March 2027, the ATO rebate rates are below. The rate is set by the age of the oldest person on the policy and by the income tier, and the ATO’s page was last updated on 22 June 2026. The right-hand column is what the Department of Health, Disability and Ageing’s July 2026 fact sheet says would apply to every age group from 1 April 2027 if the bill passes.

On a private health insurance statement these age rates appear as benefit codes 35 and 36 for 65 to 69, and 40 and 41 for 70 and over.

Source: ATO and Department of Health, Disability and Ageing. Last verified 8 October 2026.

A year earlier, for premiums paid from 1 April 2025 to 31 March 2026, the ATO rates were slightly higher, and the age uplift was slightly larger:

Source: ATO. Last verified 8 October 2026.

The income tiers for the 2026–27 financial year are A$105,000, A$123,000 and A$164,000 for singles, and A$210,000, A$246,000 and A$328,000 for families. In 2025–26 they were A$101,000, A$118,000 and A$158,000 for singles. The bill does not change the tiers or their indexation (Senate committee report, October 2026).

How much more would over-65s pay per A$1,000 of premium?

The age uplift is a fixed number of percentage points, so the cost of losing it scales with the premium. On rates for 1 April 2026 to 31 March 2027 (ATO) and the proposed rates from 1 April 2027 (Department of Health, Disability and Ageing, July 2026), an Australian policy whose oldest member is 65 to 69 would lose about A$40.20 of rebate for every A$1,000 of premium. A policy whose oldest member is 70 or over would lose about A$80.40, twice as much, because the 70-plus uplift is twice the size.

The final column shows the same change as a share of what the policyholder actually pays. A base-tier policyholder aged 70 or over would pay 11.85% more after the rebate, before any 1 April 2027 premium rise.

Plain Cover calculation from ATO and Department figures. Last verified 8 October 2026.

What would three households pay from 1 April 2027?

These worked examples use the ATO rates for 1 April 2026 to 31 March 2027 and the Department’s proposed rates from 1 April 2027. The premiums are illustrations, not quotes, and they leave out the 1 April 2027 premium round, which had not been announced as at 8 October 2026. They are general information about Australian rules, not personal advice.

Joan, 72, single, income A$48,000, premium A$3,000 a year. Base tier. Now: A$3,000 × 32.158% = A$964.74 rebate, so Joan pays A$2,035.26. From 1 April 2027: A$3,000 × 24.118% = A$723.54, so Joan pays A$2,276.46. That is A$241.20 more a year, or A$20.10 a month.

Ravi, 67, and Meena, 63, family income A$230,000, premium A$7,000. Tier 1, and the rate follows Ravi as the older person. Now: 20.098% = A$1,406.86. From 1 April 2027: 16.079% = A$1,125.53. The couple pays A$281.33 more a year.

Bill and Ann, both 74, family income A$90,000, premium A$8,000. Base tier. Now: 32.158% = A$2,572.64. From 1 April 2027: 24.118% = A$1,929.44. The couple pays A$643.20 more a year, rising from A$5,427.36 to A$6,070.56.

A fourth household, a single aged 68 earning A$170,000, is in tier 3 for 2026–27 and gets 0% before and after, so nothing changes.

Will pensioners lose part of their private health insurance rebate?

Yes, if they hold private health insurance and the oldest person on the policy is 65 or over. The Australian Government Rebate depends on income tier and age, not on pension status, and the bill as described in the Senate committee report of October 2026 contains no exemption for pensioners or concession card holders. An age pensioner whose income is within the base tier for 2026–27 (A$105,000 or less for a single) and who is 70 or over would go from 32.158% to 24.118%. At 65 to 69 the drop is from 28.139% to 24.118%.

The committee’s majority recommended the bill be passed on 7 October 2026. The Australian Greens’ dissenting report singled out pensioners and part-pensioners on fixed incomes, and said the Greens have serious concerns about the bill in its current form. Coalition senators recommended it not be passed. The committee reported on the first bill. Whether Parliament amends the [No. 2] bill for any group is not known as at 8 November 2026.

People in this situation typically weigh up three things before April 2027: keeping the same cover at the higher net price, moving to a lower tier or a higher excess, or keeping extras only. Moving to a lower level of cover does not restart waiting periods already served for the benefits kept, as our waiting periods guide explains, but dropping hospital cover can bring a Lifetime Health Cover loading on return. This is general information, not personal advice.

Who is not affected by the over-65 rebate change?

Three groups of Australians see no change to their private health insurance rebate under the bill, and one rule stays as it is, on the ATO’s 2026–27 tiers and the Department of Health, Disability and Ageing’s July 2026 fact sheet:

• Policies where everyone is under 65. The under-65 rates of 24.118%, 16.079% and 8.038% stay as they are, and the Department says the indexation factor is set to 1 for 1 April 2027, so they would not move that day.
• Tier 3. Singles earning over A$164,000 and families over A$328,000 in 2026–27 already get 0% at every age.
• People without private health insurance. The rebate only reduces a premium.
• The Lifetime Health Cover rule. The rebate already excludes any loading, and the bill keeps that rule.

The group that is affected is larger than many expect. The rate follows the oldest person covered, so a 63-year-old on a joint policy with a 66-year-old partner is affected today. The Minister put the total at about 3.2 million people aged 65 and over with incomes below the rebate cut-off (second reading speech, quoted in the Bills Digest of 6 July 2026). APRA counted 12,823,752 Australians with hospital cover at 30 June 2026, or 45.8% of the population.

Does the bill change the Medicare Levy Surcharge, LHC loading or income tiers?

No. The Parliament of Australia’s summary of the bill, read on 8 October 2026, lists only two Acts: the Private Health Insurance Act 2007, for the rebate percentage, and a technical amendment to the Age Discrimination Act 2004. The Medicare Levy Surcharge sits in other legislation and is not touched.

For the 2026–27 financial year the Medicare Levy Surcharge stays at 1%, 1.25% and 1.5% for singles earning over A$105,000, A$123,000 and A$164,000 without appropriate hospital cover (ATO, last updated 22 June 2026). In 2025–26 the same rates applied above A$101,000, A$118,000 and A$158,000. A retiree above the base tier who drops hospital cover to save the lost rebate can end up paying the surcharge instead; the surcharge calculator shows the figure.

Lifetime Health Cover is also unchanged. PrivateHealth.gov.au, read on 8 October 2026, still describes a 2% loading for every year over 30, a 70% maximum, removal after 10 years of continuous hospital cover, and an exemption for anyone born on or before 1 July 1934. The rebate continues to apply only to the base premium, not the loading. The income tiers and their indexation each 1 July are unchanged too (Senate committee report, October 2026).

How much would the government save, and where would the money go?

The Australian Government costs the over-65 rebate change at A$2,994.7 million less spending over the four years to 2029–30. The Explanatory Memorandum’s figure, as quoted in the Senate committee report of October 2026, matches the “Modernising Private Health” row in Table 2 of Budget Paper No. 2 for 2026–27, year by year:

Source: Budget Paper No. 2, 2026–27, Table 2. Last verified 8 October 2026.

For scale, the Bills Digest says the government expects to spend A$7.9 billion on the rebate in 2026–27. The committee report lists where the savings would go: capital subsidies for residential aged care, a higher accommodation supplement, 20 more Specialist Dementia Care units, and wider access to the Support at Home program. The Minister’s stated aim, quoted in the Bills Digest, is to address intergenerational inequity and better target the rebate. The Minister’s speech estimates about 44,000 fewer people aged 65 and over will be insured by 2028–29 than without the change, or 0.4% fewer insured people.

Why do cost estimates range from A$250 to A$1,600 a year?

Several numbers are in circulation for what the over-65 rebate change costs Australians, and most are right about different things. The Minister’s second reading speech, quoted in the Bills Digest of 6 July 2026, put the average at around A$250 a year. The Department of Health, Disability and Ageing’s July 2026 fact sheet says A$252, and the Impact Analysis summary gives an average reduction of A$252 in 2028–29.

The higher figures come from two sources. The Bills Digest reports that Private Healthcare Australia’s modelling of annual increases above A$1,600 for some retirees includes both the rebate change and the expected premium rise on 1 April 2027. The Opposition used a similar “up to A$1,600” figure. On the rebate change alone, a base-tier couple aged 70 or over would need a premium of about A$19,900 a year to lose A$1,600, because A$1,600 ÷ 8.04% ≈ A$19,900.

An average across 3.2 million people is also pulled down by those aged 65 to 69, whose cut is half the size of the 70-plus cut. For a single household the per-A$1,000 table above is the most reliable guide, because it needs only the premium and the income tier.