Private health insurance rebate cut for those aged 65 and over (May Federal Budget 2026)

The Budget confirmed the Government’s previous announcement that the private health insurance rebate will be reduced for those aged 65 and over, to match  the level paid for those under age 65. The Government has indicated its intention to redirect the savings from this measure into aged care.

In practical terms, the changes will remove the higher age-based private health insurance rebate tiers that currently apply where the oldest person covered by the policy is aged 65–69 or 70 and over.

Under the current rebate percentages applying from 1 April 2026 to 31 March 2027, and the income thresholds applying from 1 July 2026, the base-tier rebate (for singles with income of $105,000 or less and families with income of $210,000 or less) is 24.118% for those aged under 65, 28.139% for those aged 65–69, and 32.158% for those aged 70 and over. The announced measure will flatten the higher older-age rebates back to the under-65 rate, with effect from 1 April 2027.

Industry concerns

Private Health Australia has said the proposed cut to the rebate will increase the out-of-pocket cost for more than three million people aged 65 and over, including more than 400,000 pensioners with health insurance. The industry body warned that those aged 70 and above with Gold hospital cover could see premiums increase 21% from April 2027, translating to an annual premium increase of about $807 for an individual and $1,614 for a couple.